EU's modernised social security - Briefing30 April 2010
by Ina Dimireva -- last modified 06 May 2010
On 1 May 2010, new regulations on social security coordination in the European Union enter into force. The aim is to make life easier for Europeans on the move.
What are the main changes?
More and better information
Information must be provided actively and delivered rapidly by the social security institutions in Member States. Services provided must be "user-friendly": institutions should communicate with the citizen in a way that can be easily understood. A limited number of paper documents will be issued covering the situations in which citizens need to carry proof of their entitlements. These "portable documents" have a new, easily identifiable design and present the information in a user-friendly way. For pensions, for example, the P1 document will provide citizens a summary of all the decisions on their claim made by each of the countries where she/he was previously employed.
Simpler and more efficient procedures
More up-to-date procedures will lead to quicker and simpler services for citizens, cutting red tape and reducing the administrative burden for public services.
A major new information network will be launched, namely the EESSI (Electronic exchange of social security information) network. This will enable institutions in different countries to exchange information electronically. The new system will eliminate around 2000 paper forms and the formalities to be completed by citizens will be streamlined.
Faster access to benefits
Another new aspect is temporary affiliation. Whenever the institutions of different EU countries are unable to agree on an individual’s status with a view to identifying which social security legislation applies to him/her, temporary affiliation to a social security scheme is put in place, with the payment of benefits. For the person concerned, this means they have access to treatment and sickness insurance benefits under a statutory scheme during this period. Citizens will no longer have to suffer the consequences of the complexity of social security schemes.
More people can benefit
The updated coordination system has a broader scope. As well as workers and their families, it now covers people who are currently out of work, not yet in work or no longer working – so more people will benefit.
Its scope also extends to new benefits such as paternity and pre-retirement benefits, adapting to developments in social security legislation at national level. Numerous simplifications have been made in the different branches of insurance covered by coordination, such as unemployment benefits, family benefits, and sickness insurance.
Who is affected?
The provisions cover anyone who moves to another EU country to settle permanently, work temporarily or study, and even those who are travelling to take a holiday. A few examples:
People who cross the border to work receive family benefits paid by the country where they work, even though they do not live there. Likewise, people who move to work in another EU country will not be penalised but still enjoy social security coverage.
Jobseekers who decide to try their luck in another EU country will continue to receive unemployment benefits for a minimum of three months, extendable to six months.
Anyone who has worked in several EU countries throughout their career is entitled to combine their periods of insurance in order to obtain a full pension. Likewise, Europeans who decided to retire in another EU country will maintain their rights to a pension.
During the summer months, millions of Europeans go to another European country on holiday. The current system of coordination already protects them if they need healthcare during their stay, in the event of an accident or illness. The European Health Insurance Card provides access to health services in each Member State for anyone requiring care during a temporary stay. Care is provided on the same basis as for residents of the Member State in question.
What is the EU's role in the social security field?
Social security systems are the exclusive responsibility of the national authorities, and are very diverse in terms of both their organisation and the benefits offered.
Rather than harmonising the national social security systems, the EU coordinates them. The coordination rules create bridges between national systems to guarantee that citizens can enjoy uninterrupted cover when moving within Europe. By preventing citizens from losing out as a result of their choice to live or work in another country, the coordination rules make the right of free-movement within the Union effective.
The new provisions are based on existing rules, the first of which (Regulation No 3) dates from 1959. The coordination of social security schemes, updated by Regulation 883/04 and its implementing regulation 987/2009, is therefore the culmination of 50 years of cooperation at European level.
How many Europeans are affected?
According to recent estimates by Eurostat, in 2008 around 11.3 million EU citizens or 2.3% of the overall EU population lived in another Member State to that of which they were a national. Over a million people cross a border every day for work.
So far around 190 million European Health Insurance Cards have been issued (38% of the population). 27% of EU residents spend at least four nights a year on holiday in another Member State.
Every year some 250 000 people are able to export a proportion of their pension rights when they retire because they have worked in more than one EU country.
Recent studies suggest that 10% of Europeans say they have lived and worked in another country (inside or outside the EU) at some point in their past. Three percent have lived in another country but did not work there, and one percent worked in another country before but did not live there.
Nearly two out of ten Europeans (17%) envisage working abroad at some time in the future. 12% of them are considering to do so in the next year, 47% in the next five years.
A majority of Europeans (60%) think that people moving within the EU is a good thing for European integration, 50% think it is a good thing for the labour market, and 47% think it is a good thing for the economy.
What else is the EU doing to encourage worker mobility?
Mobility is a key challenge for the future: the EU aims to ensure that citizens can fully benefit from working, living and moving in a unique and open Union. The Europe 2020 strategy outlines how intra-EU mobility will help countries to exit the economic crisis, for example through better matching the needs of the labour market. It is also a lever to raise the quality of education through mobility of students, trainees and researchers.
Currently only 2.3% of Europeans exercise their right to work in a different Member State. The EU aims to raise public awareness of this right and to support jobseekers in their search at European level. EURES, the European employment service network, is at the forefront of the EU’s efforts to promote worker mobility. A vast database brings together job offers from all over Europe and information and advice on living and working conditions in the various Member States. In addition to its web portal, EURES has a network of 700 advisers on hand to inform jobseekers and employers about recruitment at international level.
Source: European Commission