Social security coordination

The European Parliament adopted by 511 votes to 87, with 61 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 883/2004 on the coordination of social security systems and Regulation (EC) No 987/2009 laying down the procedure for implementing Regulation (EC) No 883/2004.

The amending regulation introduces clearer criteria for determining which country’s social security legislation applies for EU workers who live or work in another EU member state. It also encourages member states to share necessary information promptly in order to identify errors or fraud, including abusive practices, such as letterbox companies.

The European Parliament adopted its position at first reading by amending the proposal as follows:

Determination of applicable legislation

Persons to whom this Regulation applies are subject only to the legislation of a single Member State. Persons receiving cash benefits because or as a consequence of their activity as an employed or self-employed person shall be considered to be pursuing that activity. This does not apply to invalidity, old-age or survivors' pensions, to pensions in respect of accidents at work or occupational diseases, or to long-term care benefits in cash provided to the person in need of care.

Workers posted to another Member State

A person employed in one Member State by an employer who normally carries out their activities there, and whom that employer sends to work on their behalf in another Member State, should remain subject to the legislation of the first Member State, provided that the foreseeable duration of that work does not exceed twenty-four months and that this person does not replace another employed worker previously sent or a self-employed worker. To combat fraud, these workers must have been affiliated to social security in their country of origin for at least three months before being sent abroad.

A person who is employed or self-employed in one Member State while receiving unemployment benefits from another Member State will be subject to the legislation of the Member State paying the unemployment benefits.

Prior notification required

Where an employed or self-employed person pursues his or her activity in a Member State other than the competent Member State, the competent institution of the Member State whose legislation is applicable should be informed thereof in advance and an attestation. This will not apply for business trips and short-term postings of a maximum of three days, though the construction sector is not covered by this exception.

Activities in two or more Member States

For the purpose of identifying the registered office or place of business of an undertaking, where a person pursues activity in two or more Member States, a series of factors should be taken into account to determine where the essential decisions of the undertaking are adopted and where the functions of the central administration are carried out. Examples of such factors are the turnover, the places where its general meetings are held, and the habitual nature of the activity pursued.

Unemployment benefits

Under the amended text, an unemployed person will retain their entitlement to benefits for a period of six months from the date on which they ceased to be available to the employment services of the Member State they left, provided that the total period for which benefits are paid does not exceed the total period of benefits to which they are entitled under the legislation of that Member State. This period may be extended by the competent services or institutions until the expiry of the unemployed person's entitlement to benefits.

For cross-border workers, it is clarified which Member State is responsible for paying benefits. If a cross-border worker has been employed, self-employed, and/or insured for an uninterrupted period of 22 weeks in a Member State other than their country of residence, benefits will be paid by the country in which they work.

Sickness benefits, long-term care benefits, maternity and paternity benefits (similar)

The regulation establishes a stable legal framework for long-term care benefits, which generally maintains the coordination of sickness benefits and includes a clear definition and list of such benefits. Long-term care benefits refer to benefits whose primary purpose is to meet the care needs of a person who, on account of an impairment due, for example, to old age, disability or illness, requires considerable assistance from others to carry out essential activities of daily living for an extended period of time.

The regulation also makes a clearer distinction between family benefits in cash, intended to replace income when a person gives up or reduces work to raise a child, and other family benefits. This will promote a more equal sharing of child-raising responsibilities and removes possible financial disincentives for parents who reduce their working time to care for their child.

Under the new rules, an insured person and the members of his or her family staying in a Member State other than the competent Member State should be entitled to the benefits in kind which become necessary on medical grounds or due to the need for long-term care during their stay, taking into account the nature of the benefits and the expected length of the stay. Those benefits should be provided on behalf of the competent institution by the institution of the Member State of stay, in accordance with the provisions of that Member State’s legislation, as though the person concerned were insured under that legislation.

Digitalisation

Member States are to ensure that employers or the persons concerned can, subject to the establishment of the relevant procedures, access and complete a request for the determination of applicable social security legislation fully online.