Select Committee on European Scrutiny Ninth Report


CO-ORDINATION OF SOCIAL SECURITY WITH ASSOCIATED COUNTRIES










(a)
20891 
5234/00
COM(99) 675

(b)
20892 
5235/00
COM(99) 676

(c)
20893 
5236/00
COM(99) 677

(d)
20894 
5238/00
COM(99) 684

(e)
20895 
5240/00
COM(99) 682

(f)
20896
5241/00
COM(99) 681

(g)
20897
5242/00
COM(99) 679

(h)
20898
5243/00
COM(99) 680

(i)
20913
5239/00
COM(99) 683


(j)
20914
5237/00
COM(99) 678
Draft Council Decision on the position to be taken by the
Community within the Association Council established by
the Europe Agreements between the European Communities
and their Member States, of the one part, and the Republics
of Hungary, Poland, Bulgaria, Slovakia, Slovenia, Lithuania,
the Czech Republic and the Republics of Latvia, Romania
and Estonia of the other part, with regard to the adoption of
provisions for the co-ordination of social security schemes.


Hungary




Poland




Bulgaria




Slovakia




Slovenia




Lithuania




Czech Republic




Latvia




Romania





Estonia
Legal base: (variously) Articles 37-41 of the European Agreements with associated countries; unanimity
Document originated: (all) 20 December 1999
Forwarded to the Council: (all) 21 December 1999
Deposited in Parliament: ((a) to (h)) 26 January 2000
((i) and (j)) 2 February 2000
Department: Social Security
Basis of consideration: EM of 7 February 2000
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment: Legally and politically important
Committee's decision: (all) Not cleared; further information requested


Background

  2.1  EC Regulation 1408/71 co-ordinates the operation of Member States' social security schemes. It enables employees, the self-employed and their dependents moving within the Community to take with them the social security rights which they have acquired in the Member States in which they have been resident. Social security includes health. The Regulation applies to EC nationals. The Commission has made proposals to extend it to third country nationals and to up-date and simplify its provisions. We have reported several times on these proposals, most recently on 15 December 1999[19]. The documents remain uncleared.

  2.2  Europe Agreements have been reached bi-laterally between the Community and Hungary, Poland, Bulgaria, Estonia, Slovakia, Romania, Slovenia, Lithuania, the Czech Republic and Latvia (the "associated countries"). One of the objectives of the Agreements is to provide an appropriate framework for the associated countries' integration into the Community. To that end, the Agreements include framework provisions for co-ordinating the operation of social security schemes of Member States for workers who are nationals of the associated countries and are legally working within the Community.

  2.3  The framework provisions are limited to three specific matters:

  • aggregation of insurance, residence or employment in Member States for certain benefits;

  • exportability of certain benefits; and

  • family allowances to be paid for family members legally resident in the State of employment.

For the second and third of those provisions, the associated country would be required to accord similar treatment to nationals of a Member State legally working there and to members of their families legally resident there.

The document

  2.4  The Commission has now made proposals to implement the framework provisions for social security. When agreed by Council, they will need to be adopted by each of the bi-lateral Association Councils representing the Community and the individual associated country.

  2.5  The document provides a draft Association Council Decision which sets out provisions covering the obligations incumbent on both Member States and the associated countries, and also those which relate solely to the obligations of Member States. The Decision has annexed to it the provisions of EC Regulation 1408/71. The effect would appear to be the creation of obligations on Member States in respect of nationals of associated countries similar to those they already have under that Regulation to EC nationals moving within the Community.

The Government's view

  2.6  In her Explanatory Memorandum of 7 February 2000, the Parliamentary Under-Secretary of State, Department of Social Security (Angela Eagle) says that:

    "The Europe Agreements create the power to adopt provisions to implement co-ordinating social security measures in relation to the three areas outlined [at paragraph 2.3] above. Implementing these provisions would mean that the UK would have to:

      "(i)  take into account insurance in other Member States when considering entitlement to retirement pensions, incapacity benefit for nationals of the relevant country;

      "(ii)  export Incapacity Benefit to the relevant country when the benefit is being paid because of an industrial accident or disease;

      "(iii)  pay Child Benefit for family member of a worker of the relevant nationality legally resident in the UK.

    "The UK is willing to implement these provisions.

    "However, as drafted, the proposals seem to go beyond the provisions envisaged in the Europe Agreements. They aim to implement them by adopting much of EC Regulation 1408/71 which co-ordinates the operation of Member States' social security schemes and which itself requires a separate implementing Regulation.

    "The provisions of the Regulation are more wide-ranging than those for which the Europe Agreements create power. The UK will be pursuing this issue in the Working Group.

    "Implementation of the social security provisions in the Europe Agreements would lead to additional benefit and administrative costs for DSS. The additional cost in the first year is estimated at £0.5 million for all ten countries with Europe Agreements. The additional cost of implementing the Commission's proposal, which is more wide-ranging than we believe the Europe Agreements allow, would be about £3 million in the first year. The Commission has not provided any information about financial implications for the EU as a whole.

    "The Department of Social Security has undertaken no consultation on these proposals.

    "The proposals are still at an early stage. Discussions are due to start in the Central Europe Working Group."

      

Conclusion

  2.7  It is clearly desirable to progress the integration of the associated countries into the Community. Making a start in the area of co-ordinated social security provisions is a useful step in that direction. It will bring tangible benefits to some nationals of these countries ahead of their accession to the Community and will facilitate compliance at that stage with the full requirements of EC Regulation 1408/71 or any successor proposal that may be adopted. So we welcome the Commission's action in bringing forward these proposals. However, we recognise the Government's concern that the proposals appear to go beyond the provisions envisaged in the Europe Agreements. The basis of the Government's concern in that respect may turn more on the legal issue involved (whether the proposals go beyond the limits of the legal base in the Europe Agreements) rather than the financial and administrative consequences.

  2.8  On that point there is a fundamental difference of view between the Commission and the Government. For the former, the power conferred on the Association Council by the relevant Article of the Association Agreement is to adopt appropriate provisions to implement the objective of co-ordinating social security systems for workers of the applicant State employed in a Member State; the three specified matters are merely illustrative. For the latter those matters are determinative of the scope of the power.

  2.9  We are content that the Government should explore the legal issue further. We recognise also that the substance of this proposal may be affected should changes be made to Regulation 1408/71 as a result of the Commission's proposals to which we refer above (in paragraph 2.1). We do not clear the documents at this stage. We ask the Minister to explain her reasons for holding the view that the power conferred by the Association Agreements is circumscribed, the grounds relied on by the Commission for the opposite view and the positions taken up by other Member States. We also ask her to keep us informed of progress and, in particular, of any outcome on the legal concern she has expressed.


19  (18743) 13485/97 and (19764) 5133/99; see HC 23-iv (1999-2000), paragraph 2. Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2000
Prepared 24 February 2000