Summary of the public consultation on EU social security coordination Written by Dr Gabriella Berki February 2016
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EUROPEAN COMMISSION Directorate-General for Employment, Social Affairs and Inclusion Directorate D Labour Mobility Unit D.2 Social Security Coordination Contact: Marzena Brauhoff E-mail: EMPL-FRESSCO@ec.europa.eu European Commission B-1049 Brussels
Summary of the public consultation on EU social security coordination 4
FreSsco - Free movement of workers and Social security coordination This report was prepared in the framework of Contract No VC/2014/1011 Network of Experts on intra-eu mobility social security coordination and free movement of workers / Lot 1: Legal expertise in the field of social security coordination and free movement of workers. This contract was awarded to FreSsco, a network of independent experts from 32 European countries coordinated by Ghent University. Author: Dr Gabriella Berki, Professor Assistant at the Department of Labour Law and Social Security, Szeged University. Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). LEGAL NOTICE This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu). European Union, 2016 Reproduction is authorised provided the source is acknowledged.
TABLE OF CONTENTS 1. INTRODUCTION... 7 1.1. Coordination of social security systems in the EU... 7 1.2. The public consultation on EU social security coordination... 7 1.3. Who took part?... 8 1.4. Summary of the results... 10 2. COORDINATION OF FAMILY BENEFITS... 11 2.1. Who took part in the public consultation?... 11 2.2. Responses of individual citizens... 13 2.2.1. Awareness... 13 2.2.2. Opinion on the current EU rules... 13 2.2.3. Proposals for possible changes... 13 2.3. Responses on behalf of organisations... 14 2.3.1. Awareness... 14 2.3.2. Opinion on the current EU rules... 14 2.3.3. Proposals for possible changes... 15 3. COORDINATION OF UNEMPLOYMENT BENEFITS... 17 3.1. Who took part in the public consultation?... 17 3.2. Responses of individual citizens... 19 3.2.1. Awareness... 19 3.2.2. Opinion on the current EU rules... 19 3.2.3. Proposals for possible changes... 19 3.3. Responses on behalf of organisations... 20 3.3.1. Awareness... 20 3.3.2. Opinion on the current EU rules... 21 3.3.3. Proposals for possible changes... 21 4. COORDINATION RULES ON POSTING... 23 4.1. Who took part in the public consultation?... 23 4.2. Responses of individual citizens... 25 4.2.1. Awareness... 25 4.2.2. Opinion on the current EU rules... 25 4.2.3. Proposals for possible changes... 25 4.3. Responses on behalf of organisations... 26 4.3.1. Awareness... 26 4.3.2. Opinion on the current EU rules... 27 4.3.3. Proposals for possible changes... 27 5. GENERAL COMMENTS... 30 5.1. Responses of individual citizens... 30 5.2. Responses on behalf of organisations... 32 6
1. INTRODUCTION 1.1. Coordination of social security systems in the EU All persons who are insured in one of the EU Member States or EEA EFTA States (Norway, Liechtenstein, and Iceland) and Switzerland and who move within the EU should have their social security rights protected. Here you can read more about your social security rights when moving within the EU. EU rules (Regulation (EC) No 883/2004 and its implementing Regulation (EC) No 987/2009) coordinate but do not harmonise national social security schemes. Each Member State has its own social security system and range of benefits. EU coordination rules aim to ensure that different national legislations respect the principle of equality of treatment and that mobile persons do not lose their social security rights. 1.2. The public consultation on EU social security coordination In the framework of the European Commission s Labour Mobility Package based on a balanced approach to labour mobility, the Commission intends to propose a possible revision of the Social Security Coordination Regulation as well as a targeted revision of the Posting of Workers Directive. This initiative aims to continue the modernisation of the EU Social Security Coordination Rules by further facilitating the exercise of citizens' rights while at the same time ensuring legal clarity, a fair and equitable distribution of the financial burden among the institutions of the Member States involved and administrative simplicity and enforceability of the rules. In this context, on 15 July 2015 the Commission launched a public consultation open to individuals and organisations, which remained open for 12 weeks (until 7 October 2015). The purpose of the consultation was to gather views notably on the functioning of the current EU rules for: coordination of family benefits; coordination of unemployment benefits; and the social security coordination rules for posted employed and self-employed persons. This followed a previous public consultation exercise launched on 5 December 2012 on the subject of long-term care benefits and coordination of unemployment benefits. 1 Within the consultation, citizens were able to also make general remarks on cross-border coordination and payment of social security benefits and/or make proposals for future consultations. The consultation consisted of three parts. One was dedicated to the coordination of family benefits (Chapter 2), another one to the coordination of unemployment benefits (Chapter 3) and the last one to the coordination rules on posting (Chapter 4). The respondents, who were asked to fill in some details about their background, could reply to any of the three parts and had the possibility to give their opinion regarding the cross- 1 Summary of Public Consultation on the coordination of long-term care and unemployment benefits in the EU. 7
border coordination or payment of social security benefits and their suggestions for future consultations on EU social security coordination rules (Chapter 5). Although some respondents referred to specific problems affiliated to social security coordination in specific countries, this summary focuses on general issues rather than on individual cases. 1.3. Who took part? The consultation received 310 online replies in total across the EU and EEA EFTA States. 200 of the replies received were from individuals (64.52%) and 110 on behalf of an organisation (35.48%). Not all respondents gave full replies to the consultation and the replies are only reflected in the results to the extent that a reply was received to a particular question. In addition, 8 organisations responded to the public consultation by means of a position paper. The different points of view expressed in these position papers have been included in Sections 2.3.3, 3.3.3, 4.3.3 and Chapter 5 of this report, but have not been taken into account for the purposes of the analysis of the questionnaire contained in Chapters 1 to 4. Responses were received from 25 Member States or EEA countries. The vast majority of replies were submitted in Belgium (76 out of 310), accounting for 24.52% of the responses. The second and third most replies were received from Germany (14.84%) and Poland (12.58%). 8
Replies by nationalities Country Total As an individual On behalf of an organisation Number % of the total number of replies Number % of the total number of replies Number % of the total number of replies Belgium 76 24.52 50 16.13 26 8.39 Germany 46 14.84 24 7.74 22 7.10 Poland 39 12.58 27 8.71 12 3.87 Finland 15 4.84 9 2.90 6 1.94 Greece 15 4.84 15 4.84 0 0 France 12 3.87 9 2.90 3 0.97 Netherlands 12 3.87 7 2.26 5 1.61 Sweden 11 3.55 4 1.29 7 2.26 Spain 11 3.55 9 2.90 2 0.65 United Kingdom 9 2.90 5 1.61 4 1.29 Hungary 9 2.90 1 0.32 8 2.58 Italy 7 2.26 7 2.26 0 0 Czech Republic 7 2.26 4 1.29 3 0.97 Denmark 6 1.94 5 1.61 1 0.32 Romania 6 1.94 4 1.29 2 0.65 Luxembourg 5 1.61 4 1.29 1 0.32 Portugal 5 1.61 3 0.97 2 0.65 Austria 5 1.61 3 0.97 2 0.65 Slovenia 4 1.29 4 1.29 0 0 Other 3 0.97 1 0.32 2 0.65 Latvia 2 0.65 1 0.32 1 0.32 Bulgaria 1 0.32 1 0.32 0 0 Iceland 1 0.32 1 0.32 0 0 Croatia 1 0.32 1 0.32 0 0 Slovakia 1 0.32 1 0.32 0 0 Liechtenstein 1 0.32 0 0 1 0.32 TOTAL 310 100 200 64.52 110 35.48 No replies were received from the following Member States where the EU Social Security Rules apply Cyprus, Estonia, Ireland, Lithuania, Malta, Norway and Switzerland The following chart shows the split of respondents according to their nationality. 9
Figure 1 Number of respondents by nationality The organisations which responded online fell within the following categories: Replies by stakeholder Type of the organisation Number Central government / Ministry 15 Other public authority (local, regional, etc.) 4 Workers organisation / Trade union 23 Employers organisation 29 Small or medium-size enterprise 13 Large organisation / company 5 Researcher / Academic 1 Think-tank / Consultancy 1 Non-governmental organisation (NGO) 10 Other 9 TOTAL 110 1.4. Summary of the results The following text provides a summary of the responses received for each of the questions in the public consultation. The three parts of the questionnaire are presented separately in this report. The text aims to cover the full range of views expressed. For the sake of clarity, the replies from individuals and the replies from organisations are presented separately. By identifying some common threads in public opinion but also highlighting the divergence in views, this public consultation provides useful information for the discussion on the social security coordination in the EU and EEA EFTA Member States and Switzerland. 10
2. COORDINATION OF FAMILY BENEFITS 2.1. Who took part in the public consultation? In total, out of 310 respondents who submitted their replies to the public consultation, 209 respondents replied to the questions on the coordination of family benefits (which amounts to 67.42% of the total number of respondents), including 122 individuals (61% of the total number of individuals) and 87 organisations (79% of the total number of organisations). The remainder of the respondents did not answer the questions on the coordination of family benefits. By nationality, large shares of the replies were submitted in Belgium (41 out of 209, which amounts to 19.62% of the total number of responses for this topic), Germany (19.62%) and Poland (15.79%). Country Replies by nationalities Total As an individual On behalf of an organisation Belgium 41 22 19 Germany 41 21 20 Poland 33 24 9 Netherlands 10 6 4 United Kingdom 9 5 4 Spain 7 6 1 Finland 7 2 5 Czech Republic 7 4 3 Sweden 7 2 5 Hungary 7 1 6 Denmark 6 5 1 Portugal 5 3 2 Greece 5 5 0 Luxembourg 4 3 1 Romania 4 3 1 Austria 5 3 2 France 3 2 1 Slovenia 3 3 0 Italy 1 1 0 Slovakia 1 1 0 Liechtenstein 1 0 1 Latvia 1 0 1 Other 1 0 1 TOTAL 209 122 87 11
No replies were received from the following Member States where the EU Social Security Rules apply Bulgaria, Croatia, Cyprus, Estonia, Iceland, Ireland, Lithuania, Malta, Norway and Switzerland The following chart shows the division of respondents according to their nationality. Figure 2 Number of respondents to the questions on family benefits, by nationality The organisations which responded online fell within the following categories: Replies by stakeholder Type of the organisation Number Central government / Ministry 10 Other public authority (local, regional, etc.) 2 Workers organisation / Trade union 19 Employers organisation 27 Small or medium-size enterprise 9 Large organisation / company 4 Researcher / Academic 1 Think-tank / Consultancy 1 Non-governmental organisation (NGO) 8 Other 6 TOTAL 87 12
2.2. Responses of individual citizens 2.2.1. Awareness Question: Are you aware of the European rules on cross-border payment of family benefits? Almost all individuals who answered the questions in relation to the coordination of family benefits answered in the affirmative, i.e. 121 out of 122 individuals. Only one individual gave a negative answer. 2.2.2. Opinion on the current EU rules Question: What is your opinion on the European rules on the cross-border payment of family benefits? 1) Strongly disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly agree No answer a) The rules are satisfactory b) The application of the rules could be improved in practice c) The rules could be explained better in practice d) The rules need to be changed 14 14 46 27 18 3 0 5 39 24 49 5 1 8 33 34 42 4 11 26 43 13 25 4 More than one third of the respondents (37.70%) were neutral towards the statement that the rules are satisfactory. A little more than one fifth (22.95%) disagreed, whereas the remaining almost two fifth (36.89%) agreed. Whereas 31.97% were neutral, there seems to be a strong agreement that the application of the rules could be improved in practice: 19.67% agreed and 40.16% strongly agreed. Similarly, beside 27.05% who indicated they were neutral, there appears to be a strong agreement that the rules could be explained better in practice: 27.87% agreed and 34.43% strongly agreed. Views markedly differed on whether the rules need to be changed: more than one third of the respondents (35.25%) were neutral, a little less than one third (30.33%) disagreed, whereas the rest (31.15%) agreed. 2.2.3. Proposals for possible changes Question: In case you think the rules should be changed, what changes would you propose? 36 out of the 122 individuals who responded to the questions on family benefits submitted textual comments to this question (29.50 of the overall responses), some of which had the exact same (or a very similar) wording. 13
About one third of these textual responses held that instead of the current legislation on competence for providing family benefits, the Member State of residence of the child should be competent. As they expressed, this solution would be desirable for a number of reasons, such as getting rid of all these complicated rules on establishing primary and secondary competent State and linking the family benefit to the socio-economic environment of the child s State of residence. Another issue which appeared in multiple replies is the harmonisation/unification of European social security schemes. Respondents argue that a European social security system should be introduced which is the same in all the countries of the EU and that we need to evolve towards a European cash benefit. Several comments were made in relation to the accessibility of the information for citizens and the complexity of the current system. Individuals complain that procedures are too long, it is currently difficult for mobile workers to compare the level of benefits when moving from country to country and the application of the rules should be made more flexible. Some exact suggestions can be found among the answers aiming at developing the current legislation and/or application, such as: communication should be improved between the national competent authorities; the legal provisions should be made more transparent and simplified; a single European social security number and a European database indicating entitlements and relevant changes should be introduced; special provisions concerning single parents should be created; special provisions concerning children with special needs (e.g. children with autism) should be created. 2.3. Responses on behalf of organisations 2.3.1. Awareness Question: Are you aware of the European rules on cross-border payment of family benefits? Each organisation which answered the questions in relation to the coordination of family benefits answered this question in the affirmative, i.e. 87. 2.3.2. Opinion on the current EU rules Question: What is your opinion on the European rules on the cross-border payment of family benefits? 14
1) Strongly disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly agree No answer a) The rules are satisfactory b) The application of the rules could be improved in practice c) The rules could be explained better in practice d) The rules need to be changed 5 23 14 30 14 1 7 10 14 31 25 0 0 9 9 41 27 1 17 24 16 22 7 1 Respondents were divided on the issue whether the rules are satisfactory. Whereas about half of them were either neutral (16.09%) or disagreed (32.18%), the other half (50.57%) agreed. Whereas 31.97% were neutral, there seems to be a strong agreement that the application of the rules could be improved in practice: 64.37% of the responses were affirmative. Beside 10.34% who indicated they were neutral, there appears to be an even stronger agreement that the rules could be explained better in practice: 78.16% of the responses were affirmative. Views markedly differed on whether the rules need to be changed: about one fifth of the respondents (18.39%) were neutral, almost half of them (47.13%) disagreed, whereas the rest (33.33%) agreed. 2.3.3. Proposals for possible changes Question: In case you think the rules should be changed, what changes would you propose? Out of the total of 87 responses, 51 textual comments were submitted on this question on behalf of organisations (58.62%), some of which had the exact same (or a very similar) wording. A number of comments call for clarification of certain terms and notions, such as family benefits, benefits of the same kind, family members and mainly dependent on the insured person (Art. 1 (i) (3) of Reg. 883/2004). It is also stated that there is considerable uncertainty about how the rules should be interpreted. Furthermore, the distinction between family benefits, non-contributory cash benefits and assistance is not clear. Several replies concern the accessibility of information and report that not only is it challenging to provide employees information on benefits which they are entitled to in another country but also that there is a great lack of knowledge among the authorities concerned and that the correct information is retrieved in the applicable authorities with great difficulty. Other remarks were made on the complexity of both the legislation and the administrative procedures. It is emphasised that it takes too long to respond to specific situations, that there is sometimes a lack of coordination rules or that they are applied incorrectly, that it takes too long to receive the first allowance and that the 15
rules on interim payments need clarity. In relation to these remarks, it is suggested to set clear deadlines by amending Regulation (EC) No 987/2009. Respondents were divided on the issue whether, while exporting the benefits, family benefits should be adjusted to the costs of living in the Member State to which they are exported. On the one hand, a number of remarks suggested that this would constitute a breach of equal treatment and disregard the usefulness of such economic transfers to a country whose economy is less advanced in the context of free movement and that this would result in a discrimination that is unacceptable with regard to European and constitutional law. On the other hand, others advocated the exact opposite by saying that it should be examined whether Article 67(1) of Regulation 883/2004 could be amended so that the amount of the child benefit which is to be paid by the Member State of employment depends on the cost of living in the child s State of residence and, if necessary, may be reduced accordingly and that the level of benefits should be set according to the level of costs of the child s country of residence, i.e. where the costs are incurred. Also the possibility to impose waiting periods (minimum working periods) as a criteria to access the system, should be considered. Some remarks advocate an alternative approach: The amount of the family benefits should be based on the level of the children s State of residence and they should be paid by this State. The country of employment should pay no more than the difference between the State of residence and the State of employment. As a result, the export of benefits from States with a higher level is reduced, and at the same time it is safeguarded that migrant workers are not treated less favourably concerning the amount of the family benefit compared to workers of the State of employment. A respondent highlighted as a problem that: In the framework of coordination it is necessary to solve cases of priority in situations where a new family is formed around a child (the claim may then arise from the biological parents as well as from a new partner, mother/father, who lives with the child in the same household the possibility of multiple overlapping entitlements to benefits from "three parents", which the current rules do not address). Another respondent shed light on a problematic interrelation between tax legislation and coordination rules, namely that a lot of employees do complain that they don t receive everything, as there might also be tax reductions that can or can t be applied for. In relation to the possible modification of the legislation on family benefits coordination, one of the position papers takes a strong stand on maintaining the current rules, namely that the country of work must remain the primarily competent Member State. The stakeholders argue that proposing the limitation or the suppression of the exportability of family benefits are contrary to the principle of free movement and equality and that making the residence of the child primarily competent would entail unnecessary administrative and jurisdictional burden and costs. But furthermore, it would dismantle the basic link between social contributions and payment of social benefits, undermining the roots of social security systems. 16
3. COORDINATION OF UNEMPLOYMENT BENEFITS 3.1. Who took part in the public consultation? In total, out of 310 respondents who submitted their replies to the public consultation, 214 respondents replied to the questions on the coordination of unemployment benefits (which amounts to 69.03% of the total number of respondents), including 127 individuals (63.5% of the total number of individuals) and 87 organisations (79.09% of the total number of organisations). The remainder of the respondents did not answer the questions on the coordination of unemployment benefits. By nationality, large shares of the replies were submitted in Belgium (48 out of 214, which amounts to 22.43% of the total number of responses for this topic), Germany (18.22%) and Poland (14.48%). Country Replies by nationalities Total As an individual On behalf of an organisation Belgium 48 29 19 Germany 39 19 20 Poland 31 22 9 Netherlands 11 6 5 United Kingdom 9 5 4 Sweden 8 2 6 Spain 7 6 1 Czech Republic 7 4 3 Denmark 6 5 1 Finland 6 2 4 Hungary 6 1 5 Luxembourg 5 4 1 Portugal 5 3 2 France 4 3 1 Romania 4 3 1 Greece 4 4 0 Austria 4 2 2 Slovenia 3 3 0 Italy 2 2 0 Other 2 1 1 Latvia 1 0 1 Liechtenstein 1 0 1 Slovakia 1 1 0 TOTAL 214 127 87 No replies were received from the following Member States where the EU Social Security Rules apply Bulgaria, Croatia, Cyprus, Estonia, Iceland, Ireland, Lithuania, Malta, Norway and Switzerland 17
The following chart shows the division of respondents according to their nationality. Figure 3 Number of respondents to the questions on unemployment benefits, by nationality The organisations which responded online fell within the following categories: Replies by stakeholder Type of the organisation Number Central government / Ministry 11 Other public authority (local, regional, etc.) 3 Workers organisation / Trade union 21 Employers organisation 27 Small or medium-size enterprise 7 Large organisation / company 4 Researcher / Academic 1 Think-tank / Consultancy 0 Non-governmental organisation (NGO) 8 Other 5 TOTAL 87 18
3.2. Responses of individual citizens 3.2.1. Awareness Question: Are you aware of the European rules on the aggregation of periods of insurance or (self-)employment for unemployment benefits? Each individual who answered the questions in relation to the coordination of unemployment benefits answered in the affirmative, i.e. 127. 3.2.2. Opinion on the current EU rules Question: What is your opinion on the European rules on the aggregation of periods of insurance or (self-)employment for unemployment benefits? 1) Strongly disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly agree No answer a) The rules are satisfactory b) The application of the rules could be improved in practice c) The rules could be explained better in practice d) The rules need to be changed 15 26 44 34 6 2 3 8 45 36 33 2 3 3 49 38 31 3 12 19 52 18 24 2 Respondents were divided on the issue whether the rules are satisfactory. Whereas about one third (34.65%) was neutral, one third (32.28%) disagreed, and about one third (31.50%) agreed. Whereas 35.43% were neutral, there seems to be a solid agreement that the application of the rules could be improved in practice: 54.33% of the responses were affirmative. Beside 38.58% who indicated they were neutral, there appears to be a similarly strong agreement that the rules could be explained better in practice: 54.33% of the responses were affirmative. Views markedly differed on whether the rules need to be changed: about two fifth of the respondents (40.94%) were neutral, almost one quarter of them (24.41%) disagreed, whereas the remaining one third (33.07%) agreed. 3.2.3. Proposals for possible changes Question: In case you think the rules should be changed, what changes would you propose? 39 out of the 127 individuals who responded submitted textual comments to this question (30.70%), some of which were identical, meaning that they had the exact same (or a very similar) wording. The majority of replies clearly group around a couple of core issues, which appear in numerous comments. 19
Most thought was given to the topic of the requirement of a minimum qualifying period, which is closely related to the question which Member State should be obliged to pay the benefits for the unemployed. The comments give the strong impression that most respondents share the idea of introducing a minimum employment/contribution period on EU level. At the same time, many argue that the Member State where the contributions are paid namely the Member State of (last) employment should provide the unemployment benefits. The views on how long this minimum qualifying period should be greatly differ. Whereas on the one hand a respondent suggests that if you worked less than 3 months in the country where you become unemployed, the unemployment benefit should come from the country of origin, the country where you worked prior to this period, a more extreme idea could be that the unemployment benefit should be the responsibility of the home member state for a period of 5 years. Until the individual has contributed 5 whole years into the new member state, they should be the responsibility of their home country. The various suggestions diverge on this scale from 3 months to 5 years. Nevertheless, a few point out that such a rule would only complicate matters further, and pose an obstacle for an increasingly freely moving European workforce. Others would give the unemployed the right to choose where to claim unemployment benefits between the Member State of last employment and the Member State of residence. It is furthermore argued that the 3+3 months limit for the exportability of the benefit is too short and should be extended (one suggestion concerns an extension to 6+6 months). Also with regard to this topic, a plea is made to harmonise/unify the European social security systems. Several respondents support the idea that a minimum amount of the benefit should be determined at EU level. With regard to the calculation of the benefits, the respondents would find it better if the calculation of benefits were to be based on the entirety of the qualification period. Additional suggestions concern the introduction of mandatory deadlines in the administrative procedures (in this case for the issuing of the U1 form); and fraud that should be prevented and combatted more efficiently the rules should be made waterproof with regard to fraud or should include anti-abuse rules in order to facilitate the sanctioning of social fraud. 3.3. Responses on behalf of organisations 3.3.1. Awareness Question: Are you aware of the European rules on the aggregation of periods of insurance or (self-)employment for unemployment benefits? Each organisation which answered the questions in relation to the coordination of unemployment benefits answered in the affirmative, i.e. 87. 20
3.3.2. Opinion on the current EU rules Question: What is your opinion on the European rules on the aggregation of periods of insurance or (self-)employment for unemployment benefits? 1) Strongly disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly agree No answer a) The rules are satisfactory b) The application of the rules could be improved in practice c) The rules could be explained better in practice d) The rules need to be changed 6 31 10 30 9 1 2 7 12 35 30 1 1 4 13 46 22 1 9 23 18 14 21 2 Respondents were divided on the issue whether the rules are satisfactory. Whereas only a low share (11.49%) was neutral, half of the remaining part disagreed (42.53%) and half of the remaining part agreed (44.83%) with the above statement. Whereas 13.79% were neutral, there seems to be a solid agreement that the application of the rules could be improved in practice: 74.71% of the responses were affirmative. Beside 14.94% who indicated they were neutral, there appears to be an even stronger agreement that the rules could be explained better in practice: 78.16% of the responses were affirmative. Views differed on whether the rules need to be changed: about one fifth of the respondents (20.70%) were neutral, more than one third (36.78%) disagreed, whereas the remaining two fifth (40.23%) agreed. 3.3.3. Proposals for possible changes Question: In case you think the rules should be changed, what changes would you propose? 56 of the 87 responses from organisations submitted textual comments to this question (64.36%), some of which had the exact same (or a very similar) wording. The requirement of a minimum qualifying period, which was an issue discussed among individuals, gained attention also among the respondents on behalf of organisations. Similar views can be found as mentioned above. It also appears that according to some respondents the application of the principle of aggregation should be bound to such a requirement: in order to be entitled to the aggregation of periods, there should be a minimum period of work in the competent State, that is, in the State of last employment, which we suggest could be at least of one month. However, there are comments opposing this approach: it is not acceptable that Member States indicate different qualifying periods for aggregation. The prerequisite for the aggregation of periods, a right enshrined in the Treaty, is thus not equal between States. This undermines the protection in case of unemployment for persons moving 21
between different Member States, which may negatively affect those who want to move freely for work within the EU. Aggregation in accordance with Article 61 should, in order to guarantee free movement, be possible after one day of work. As it was also mentioned in the summary of the responses by individuals, here as well it is suggested to introduce a European minimum benefit. A respondent emphasises that it is very hard to find reliable information and that there is a need to make all the relevant national information available in other languages as well. Other comments concern the need to improve the administrative procedures the new U1 form should make it possible to determine whether the period of employment relates to fulltime or part-time employment ; the obligatory extension of the export of the benefit to six months; a workers organisation goes as far as suggesting unlimited exportability of unemployment benefits; the provisions on frontier workers; it was argued that since specific provisions apply to this group of workers, a more precise definition should be offered by the Regulations. The calculation of the benefits for which not only the last (sometimes very short) income in the country of last employment, but also the income in other countries should be taken into account. The problem is highlighted in more detail: the calculation of the amount of the benefits solely based on the amount in the last country of employment is sometimes problematic, because after a move (e.g. a return to the original country) persons often initially take on a lower-qualified employment (which is paid accordingly), also whereas before these persons had had a much higher-level employment for years. 22
4. COORDINATION RULES ON POSTING 4.1. Who took part in the public consultation? In total, out of 310 respondents who submitted their replies to the public consultation, 234 respondents replied to the questions on the coordination rules on posting (which amounts to 75.48% of the total number of respondents), including 138 individuals (69% of the total number of individuals) and 96 organisations (87.27% of the total number of organisations). The remainder of the respondents did not answer the questions on the coordination rules on posting. By nationality, large shares of the replies were submitted in Belgium (54 out of 234, which amounts to 23.08% of the total number of responses for this topic), Germany (17.52%) and Poland (14.53%). Country Replies by nationalities Total As an individual On behalf of an organisation Belgium 54 33 21 Germany 41 20 21 Poland 34 23 11 Netherlands 10 5 5 France 10 7 3 Sweden 9 2 7 Finland 9 5 4 Greece 9 9 0 United Kingdom 8 5 3 Hungary 8 1 7 Spain 7 6 1 Czech Republic 5 3 2 Denmark 5 4 1 Portugal 5 3 2 Romania 4 3 1 Austria 4 2 1 Luxembourg 3 2 1 Italy 2 2 0 Other 2 0 2 Latvia 2 1 1 Slovenia 1 1 1 Liechtenstein 1 0 1 Slovakia 1 1 0 TOTAL 234 138 96 23
No replies were received from the following Member States where the EU Social Security Rules apply Bulgaria, Croatia, Cyprus, Estonia, Iceland, Ireland, Lithuania, Malta, Norway and Switzerland The following chart shows the split of respondents according to their nationality. Figure 4 The number of respondents to the questions on posting, by nationality The organisations which responded online fell within the following categories: Replies by stakeholder Type of the organisation Number Central government / Ministry 14 Other public authority (local, regional, etc.) 3 Workers organisation / Trade union 20 Employers organisation 26 Small or medium-size enterprise 11 Large organisation / company 4 Researcher / Academic 1 Think-tank / Consultancy 1 Non-governmental organisation (NGO) 8 Other 8 TOTAL 96 24
4.2. Responses of individual citizens 4.2.1. Awareness Question: Are you aware of the European coordination rules on social security for posted employed and self-employed persons? Almost all individuals who answered the questions in relation to the coordination rules on posting answered in the affirmative, i.e. 137 out of 138 individuals. Only one individual gave a negative answer. 4.2.2. Opinion on the current EU rules Question: What is your opinion on the European coordination rules on social security for posted employed and self-employed persons? 1) Strongly disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly agree No answer a) The rules are satisfactory b) The application of the rules could be improved in practice c) The rules could be explained better in practice d) The rules need to be changed 29 45 18 31 11 4 5 10 22 48 50 3 5 10 21 52 45 5 14 15 21 22 63 3 Respondents were divided on the issue whether the rules are satisfactory. Whereas only a relatively low share (13.43%) was neutral, a little more than half of the respondents disagreed (55.22%) and the rest agreed (31.34%) with the above statement. Whereas 16.30% were neutral, there seems to be an agreement that the application of the rules could be improved in practice: 72.59% of the responses were affirmative. Similarly, beside 15.79% who indicated they were neutral, respondents mostly agree that the rules could be explained better in practice: 72.93% of the responses were affirmative. On whether the rules need to be changed, the views also appear supportive: almost two third (62.96%, out of which 46.67% strongly) agreed, 15.56% were neutral and 21.48% disagreed. 4.2.3. Proposals for possible changes Question: In case you think the rules should be changed, what changes would you propose? 78 of the 138 individual respondents submitted textual comments (56.52%), some of which had the exact same (or a very similar) wording. The vast majority of these comments focus on four topics, namely the length of the posting period, PD A1, social dumping as well as fraud and abuse, and finally, administrative cooperation between the Member States. 25
The views were divided on whether or not the maximum length of posting should be extended or, on the contrary, should be shortened. Some argue that in terms of the posting period, the legislation should revisit Regulation (EEC) No 1408/71 and bring back the 12+12 months rule. Others, however, claim the exact opposite the period of 24 months should be extended and the time period of posting the employee should be longer than 24 months, at least 5 years. Several problematic issues related to PD A1 are addressed in the comments. On the one hand, the issuing procedures should be improved and mandatory deadlines introduced, but on the other hand, the binding nature of the document should also be reconsidered, since it causes difficulties in preventing and fighting fraud and abuse. The most important is that the other country s authority should be able to question the A1 certificate more easily. It is suggested that PD A1 could be issued at European level. Speaking of which, it is a very clear message of the replies that posting rules constitute a major source of both social fraud and social dumping. In this respect, multiple suggestions are made, such as: social contributions should be paid/collected in the Member State where the work is practically carried out (and then transferred to the Member State of insurance); alternatively, a universal contribution system, or even a universal European social security system should be introduced; effective controlling and monitoring mechanisms should be introduced (e.g. a European Inspection Service); every employee and every employer should have a unique identifier A European entity must be established in which it would be compulsory to electronically register all workers who have been posted. Any person who has been posted at least once is recorded in this entity and registered with a unique registration number by means of which the person s entire insurance history can be found. A few respondents went as far as stating that the posting rules should be abolished, because the posting mechanism has become obsolete and an instrument of social optimisation for employers rather than of protection for citizens. Some respondents suggested that the notion of replacement needs to be clarified. It is also criticised that the rules for the coordination of social security systems are not adapted to today's realities with regard to the mobility of workers. These provisions do not take into account that sometimes in order to perform the services employees need to be deployed within a few hours. There is no time for procedures. The problem of protecting the rights of workers should be distinguished from the brutal competitive struggle among countries in the internal market. Numerous respondents call for an improved cooperation between the national authorities. Electronic exchange of information is seen as a proper tool to enhance this collaboration. 4.3. Responses on behalf of organisations 4.3.1. Awareness Question: Are you aware of the European coordination rules on social security for posted employed and self-employed persons? 26
All organisations which answered the questions in relation to the coordination rules on posting answered in the affirmative, i.e. 95 out of 96. Only one organisation gave a negative answer. 4.3.2. Opinion on the current EU rules Question: What is your opinion on the European coordination rules on social security for posted employed and self-employed persons? 1) Strongly disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly agree No answer a) The rules are satisfactory b) The application of the rules could be improved in practice 17 22 15 34 8 0 5 1 10 41 38 1 c) The rules could be explained better in practice 0 5 20 40 30 1 d) The rules need to be changed 15 12 20 23 25 1 Respondents were divided on the issue whether the rules are satisfactory. Whereas only a relatively low share (15.63%) was neutral, a little more than two fifths of the respondents disagreed (40.63%) and the rest agreed (43.75%) with the above statement. Whereas 10.42% were neutral, there seems to be a solid agreement that the application of the rules could be improved in practice: 82.29% of the responses were affirmative. Similarly, beside 20.83% who indicated they were neutral, respondents mostly agree that the rules could be explained better in practice: 72.92% of the responses were affirmative. Views differed on whether the rules need to be changed: one fifth (20.83%) was neutral, 28.13% disagreed, whereas half of the respondents (50%) agreed. 4.3.3. Proposals for possible changes Question: In case you think the rules should be changed, what changes would you propose? 77 of the 96 respondents from organisations submitted textual comments, some of which had the exact same (or a very similar) wording. In these replies, similar trends can be recognised as in the individual comments, mainly focusing on the administrative procedures, better cooperation and monitoring, and the posting period. On behalf of one of the national governments, it is complained that the dialogue procedure of Decision A1 of the Administrative Commission does not work. It proves that in a lot of cases Social security institutions do not answer informative questions about posted workers and the companies that employ them or answer these questions far too late. 27
Both enhanced cooperation and monitoring were considered key issues effective application should be monitored better. Both the country of origin and of destination should monitor the situation of workers in terms of social security there should be more coordination between the competent authorities of both countries in order to ensure compliance with the rules. Moreover, improving the cooperation between the administrations in charge of the A1 looks like being a necessity. Therefore introduction of binding obligations upon the Member States to secure better enforcement could be an appropriate solution. Similarly, it is argued by an employers organisation that at the EU level systems have been put in place in order to facilitate the exchange of information between administrations but they need to be further developed and improved. It is absolutely vital to introduce a watertight monitoring system to prove that social security contributions are being correctly and fully paid. The current A1 forms are inadequate, facilitate fraudulent practices and cannot be questioned by a receiving Member State. It is crucial to improve their reliability. Common suggestions are summarised in the following comment: Better coordination with rules on posting is necessary. Reduced social security payments constitute indeed an important motivation for the abusive use of posting. The following needs to be looked at: reduce the 24-month time limit, improve notion of establishment so as to better fight letterbox companies, strengthen requirement of stable previous period of employment in the country of origin, require that the worker resumes working in the Member State of origin, new rules on bogus self-employment. On the topic of fraud and abuse, one respondent made the following suggestions: Amend Art. 5 of Regulation 987: the institution that issued the A1 must withdraw the form if indisputable evidence are provided by the institution of the place of employment. Possibility for the bona fide employer to demand damages from the institution that issued an invalid PD A1. Establishment of an arbitration procedure whose conclusions concerning the withdrawal / maintenance of an A1 would be binding for the parties concerned (with retroactive effect). Burden of proof should also rest on issuing institution, not only on the MS of employment. Making available, on request of the dossier, elements of proof that justified the issuing of the A1 form. A standardised checklist with items to be checked before issuing an A1 form. Make the A1 from a necessary condition of posting. An A1 form must be issued before the start of the posting (not retroactively). Solutions suitable for an approach using electronic exchange of information, particularly in the context of EESSI. It was a popular view that social security contributions should always be collected in the country of employment [the country of actual working activity] and transferred to the social security institutions of the sending country. Respondents were divided on the issue of the length of the posting period. One respondent argues that the posting period should be shortened to a maximum of one year without the possibility of extension. However, another adds that the maximum duration of 24 months is certainly an improvement of the previous rule of only 12 months. In practice, however, exceptions are often agreed on, only because the maximum period has been exceeded. An extension of the maximum duration would therefore be useful to limit the administrative burden for all parties involved. A trade union goes even further by adding that the temporary character of posting should be emphasised. Currently, in practice the term, according to the coordination Regulation, of 24 months is used, which can be extended by 24 months after a 3-month break and that it is in favour of limiting the term in the Posting Directive to 3 months, with a possible extension to 6 months. 28
Some respondents argued that certain terms and notions call for clarification, such as employer, employment, replacement, direct link and normal activities of the employer. Moreover, it should be made clear whether the system of posting can be applied to other categories of persons such as trainees and students. Other respondents proposed that the tax rules and social security rules should be synchronised. Three position papers were submitted which concerned posting issues. Two of them addressed problems which were already mentioned above, whereas the third one was dedicated to the effective prevention of attempts to circumvent the legal provisions concerning posting of workers through the usage of letterbox companies. It draws attention to the fact that letterbox companies are one of the most problematic violations of the posting provisions. It emphasises that it is necessary to find practical features that distinguish undertakings carrying out normal economic activity on a commercial basis from bogus companies operating as posting platforms. The stakeholder suggests that in order to determine whether the posting undertaking is not a letterbox company, it should be determined if a company exclusively or predominantly posts workers to related entities; or the whole or a predominant part of income in the host Member State is obtained by providing services for related entities. 29
5. GENERAL COMMENTS 5.1. Responses of individual citizens Question: Do you wish to raise other issue(s) regarding the cross-border coordination or payment of social security benefits? 75 individuals out of 200 respondents (37.50%) submitted replies to this question, some of which had the exact same (or a very similar) wording. The comments concern a wide variety of topics, but some issues received attention in numerous replies. Several respondents shared the view that there is a need to harmonise/unify both the social security and the tax systems in the EU. Social security coordination requires at least uniform minimum rules and minimum wages in all member states! The lack of those two will encourage fraud and abuse which is not desirable regarding the current budgetary condition of the EU. It was argued that a European institution should be dedicated to this exercise, such as a European employment fund or a European crossroads bank on social security. Concerns were expressed regarding the lack of knowledge both on the competent authorities side and among citizens. With regard to the former, respondents were of the view that training for administrative staff is required, whereas with regard to the latter, easy access to information should be offered also in foreign languages. Make more noise - only very few people know that there are homepages like Your Europe or EURES or Europe Direct. The difficult and time-consuming administrative procedures were also criticised by respondents. It often takes too long to settle administrative disputes and receive benefits in cross-border situations. Transition periods are often long. For example, a Member State terminates social security more quickly than the target country registers a person as insured and thus covered by its social security system. In this case, a person can be temporarily left without social security. Electronic exchange of information is expected to facilitate the fast(er) settlement of cross-border claims. As an alternative to national administrative procedures, a couple of comments suggest that the decision-making could be placed at EU level, so the decisions e.g. on the applicable legislation would be made centrally thus insuring a coherent, uniform EU-wide practice. Many complaints are phrased on the ground of complexity and lack of transparency within the coordination system. The need for simplifying, clarifying and effectively communicating EU legislation is considered a must. Universal interpretation and application should be ensured and monitored. Prevention of and the fight against fraud and abuse should be set higher on the agenda. All of these call for better cooperation and more efficient enforcement mechanisms. It's all far too complicated and often pro-active action from the potential beneficiary is needed. [ ] Non-take-up is a huge issue at the national level, let alone when cross-border issues play a role. Some respondents shared their personal stories to illustrate the difficulties that mobile workers face in practice. Some more specific remarks are made in relation to the status of frontier workers; the relation between Regulation (EC) No 883/2004 and Directive 2004/38/EC; the usage of the EHIC; 30
the forms used for the purposes of coordination (PDs, SEDs, former e-forms); the status of mobile pregnant women; the status of public sector workers; the status of international transport workers and seafarers; long-term care benefits; coordination of activation measures; the introduction of a European basic income. Question: Do you have any comments in relation to this questionnaire and/or suggestions for future consultations on EU social security rules? 38 textual comments (out of 200 replies 19%) were submitted by individuals to this question, some of which were identical. A number of respondents expressed dissatisfaction with the current consultation/questionnaire. The most common grounds for criticism were that the questionnaire was very basic/too general/brief and that it should have been more detailed/more elaborate and contain more topics; its purpose and aim were not clear; the space offered for the comments/proposals (500 characters) was too limited. In contrast, a couple of respondents expressly praised the consultation/questionnaire for being easy and quite understandable, and a few were clearly in favour of opportunities to participate in such exercises. A respondent suggests to add a share button to the questionnaire (e.g. next to the submit button), so that the questionnaire can easily be send to friends and other people who might be interested in the topic. Another practical suggestion for the formulation of the questionnaire is that, since such topics mostly concern mobile citizens, it would make sense to split country into country of residence and country of nationality (possibly with another field for 'other EU countries where you have paid for / used social security benefits'). Several specific issues causing difficulties and calling for further actions appeared in the comments, such as the position of housewives ; a lack of tools to prevent double registrations, double residences and misuse of the EHIC ; access to official and reliable data ; harmonisation of national systems if not in terms of the amounts, then at least in terms of their operation, criteria, periods etc. ; lack of awareness of citizens of both the coordination rules themselves and the consultation procedures; 31
lack of knowledge of authorities and other persons and institutions involved a respondent suggests to build in such knowledge into the training programmes of e.g. social workers; discrepancies of national application of the rules; need for more cooperation and monitoring. It was pointed out that the rules are difficult to understand for people and that coordination rules should be transparent and clearly communicated. More importantly, they need to be fair across the EU member states. Respondents also urged the European Commission to ensure that no one is left without access to minimum amount for existence but has a basic income, and to create a special EU fund dedicated to this. It was recommended that consultation procedures should be carried out at national level in order to ask about the operation of and the inconsistencies characterising the national social security schemes. 5.2. Responses on behalf of organisations Question: Do you wish to raise other issue(s) regarding the cross-border coordination or payment of social security benefits? 78 replies (out of 110 responses 70.90%) to this question were submitted on behalf of organisations, some of which were identical. Some remarks, which were already mentioned in the above sections, will not be addressed here again. The lack of clarity and transparency was pointed out as well as the administrative slowness and heaviness. As to the administrative cooperation, it was emphasised that the exchange of information (free movement of information between the competent institutions and authorities) should be facilitated to a far greater extent, as well as the mutual recognition of factual findings which do not tally with the legal reality (presented). A respondent complained that certain changes to the coordination legislation were not favourable for the citizens and thus future proposals for changes should focus more on the rights of the individual. Several respondents drew attention to the lack of knowledge even within the competent authorities. The ignorance of citizens was also reported as an issue. With regard to sickness benefits, a respondent highlighted a few problems: In Title II of Regulation 883/2004, there are no rules for family members who have sickness rights pursuant to the provisions of this chapter if the family member from whom they derived the rights dies. This gap should be filled. Also, better rules are needed for pensioners who fall under Article 24 or 25 of Regulation 883/2004 with regard to sickness rights in the event of a temporary stay outside of Europe. Recommendation S2 of the Administrative Commission is not sufficient. A comment also concerns sickness benefits and points out pitfalls of the administration: competent authorities do not take a consistent approach: Doctors/Hospitals in some member states refuse to treat persons on the same basis as an insured person unless an S1 certificate is obtained (EHIC is not accepted). It is not clear if authorities should issue separate S1s for each family member. 32
Some more specific remarks are made in the replies to the questionnaire in relation to the insurance status of mobile researchers and the possibility to insure employees in more than one country; long-term care benefits the need to regulate them under a separate chapter; increased mobility and new forms of mobility; the status of international transport workers; the status of frontier workers; the status of public sector workers; the usage/non-acceptance of the EHIC; standardisation of pension systems; cross-border activation measures and vocational rehabilitation; discrimination and unequal treatment of mobile and posted workers; the need for clarification of the relationship between Directive 2004/38/EC and Regulation (EC) No 883/2004: Uncertainties derive notably from the interaction with Directive 2004/38 on the Free Movement of Citizens, such as through the provision on access to social assistance (Art. 3). In view of equal treatment principles and fair distribution of the costs of social security, there is a need to take this interaction better into consideration; the provision of regionally tailored, cross-border information ; the fight against fraud and abuse (e.g. preventing the forgery of A1 certificates): the EU needs to assist Member States in enforcing and further developing existing control and surveillance mechanisms, and further, to promote and facilitate cooperation between Member States. Control mechanisms to prevent chain-posting could also be developed ; the prohibition of replacement in the event of posting. Some of the position papers also concerned a number of issues especially related to specific categories of professionals and the rules on applicable legislation which must be raised here, such as the principle of home base, which the stakeholder states has not been implemented properly. It claimed that the current approach which enumerates certain situations where the home base principle does not apply, neutralises the improvements introduced by Regulation (EU) No 465/2012. Furthermore, it underlined that there should be specific guidelines to determine what constitutes a change in relevant situation for crews. At the same time, the 10-year transition period should be shortened considerably. demands for the coordination of social security systems in relation to drivers engaged in international road transport, who within one month of work perform transport services in several countries. The stakeholder suggested applying the fleet law to these persons similarly to sailors under Article 11 (4) of Regulation (EC) No 883/2004. 33
difficulties stemming from the determination of the legislation applicable to people working in the live performance sector, who are highly mobile and often engaged in simultaneous employment. The stakeholder complained that this determination process is long, burdensome, complicated, often difficult because of language, time-consuming and costly. Moreover, it raises privacy issues on the workers side. In fact, the stakeholder considers it as a hindrance to the free movement of workers and suggests introducing an exception for the highly mobile artists. the urge to improve the legislation in favour of the self-employed. The stakeholder emphasised the importance of solo-entrepreneurship and calls for adjustments in the social security systems which are traditionally designed for persons working within the framework of traditional employment contracts. Nevertheless, for lack of harmonisation of social security systems, most of the points made in this position paper are more relevant for the national social security legislations than they are for the European social security coordination legislation. Question: Do you have any comments in relation to this questionnaire and/or suggestions for future consultations on EU social security rules? 58 textual comments (out of 110 replies 52.73%) were submitted to this question on behalf of organisations, some of which had the exact same (or a very similar) wording. Some remarks, which were already mentioned in the above sections, will not be addressed here again. Similarly to individual respondents, the space (500 characters) offered for the responses is heavily criticised by stating that it barely offers the possibility to give detailed comments. It is suggested that it would be better if it were possible to include a PDF file (or Word file) as an attachment. The development of administrative procedures and cooperation between competent institutions does not cease to induce further comments. A researcher shared that the EU Rights Project has found that delay is the biggest killer of EU welfare rights - tantamount to refusal without appeal. A respondent underlined that the representativeness of the respondents is highly questionable. Another respondent claimed that not enough publicity was made for this public consultation and suggests that Facebook could be used to reach more people. The aim and the content of the questionnaire were also criticised. Real reasons behind and final purpose of such consultation aren't clear - it risks to gather vague, unclear and even misleading answers. This kind of consultations should not replace proper Social Partners consultation. Supposed abuses alone can't trigger revisions of EU SSC legislation; they can rather lead to its better enforcement, monitoring of proper implementation at national level, strengthening coordination of inspections at EU level as well as cooperation at national level. One Member State complained that the additional topic of posting was not properly discussed in the Administrative Commission and the Member States have not been able to express their opinion in more detail at this level. We fear that the inclusion of this topic could significantly burden the already complicated and long negotiations in the Council. Other comments concern a variety of topics, such as the procedures involving the EHIC; a lack of awareness/information/competence of authorities; 34
long-term care benefits; divergent application of Article 11 (2) (i) of Regulation (EC) No 883/2004; benefits for accidents at work and unemployment; the (lack of proper) implementation of the home base-rule for air crew; practical guidance to prevent a dual payment of contributions; simultaneous employment; posting in the fields of agriculture and fisheries. 35
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