SOCIAL SECURITY SYSTEMS (5896/06, 9584/06)
Letter from the Chairman to James Plaskitt
MP, Parliamentary Under-Secretary of State, Department for Work
Your Explanatory Memorandum dated 15 February
was considered by Sub-Committee G on 23 March.
We note that the Government is still assessing
the Proposal and hopes to submit a supplementary Explanatory Memorandum
before the end of this month. The document will be retained under
scrutiny in the meantime.
24 March 2006
Letter from the Chairman to James Plaskitt
Your supplementary Explanatory Memorandum dated
30 March was considered by Sub-Committee G on 4 May.
We are grateful to you for setting out the Government's
main concerns at this stage and note that the full implications
cannot be assessed until they have been clarified through the
negotiations which are currently under way.
In the circumstances, we will continue to retain
the document under scrutiny. We would be grateful if you would
keep us informed of significant progress, including the outcome
of the discussion expected at the Employment, Social Policy, Health
and Consumer Affairs Council in June.
5 May 2006
Letter from James Plaskitt MP to the Chairman
My Explanatory Memoranda of 15 February 2006
and 30 March 2006 refer. I am now writing to provide a progress
report on the negotiations to amend the Regulation that implements
the European Social Security Coordination Regulations.
The proposal to agree an implementing Regulation
for the simplified coordination provisions is complex and will
take some time to work through in the Council. Consequently the
Member States have decided that the Council will reach a general
approach on a chapter-by-chapter basis. This matches the successful
approach already taken with the main coordinating Regulation.
The June Council agreed a general approach on Titles I and II.
This is a provisional agreement, and the final text may be changed
as a result of issues that arise in future discussions.
As I explained in my Supplementary Memorandum
in March, an important issue was the Electronic Exchange of information.
The Commission wants to improve coordination by using electronic
exchange rather than depending on paper forms in the post. The
UK has welcomed this, but only agreed to it on the basis that
Member States will have adequate time to make the transition as
there will be considerable work involved in preparing for this.
A feasibility study is underway and work will continue at official
level to ensure a successful move to electronic exchange in the
Co-ordination requires the exchange of data
between social security institutions of all the Member States.
This includes personal identification data, social insurance and
career history and benefit claim details. In most cases such exchanges
are still made by paper involving over 80 different standard forms.
Electronic exchange of this information will improve European
coordination. The agreed text provides a clear statement that
all States will exchange data electronically.
Reaching agreement on the issue of electronic
exchange was the most important aspect of these negotiations.
Other areas of interest are:
Provisional application of legislation
There is currently no provision to protect people
in the rare cases where Member States cannot decide which scheme
they should be insured with. The Council agreed that where there
is a difference of views between two or more Member States about
which legislation should be applied, the individual will provisionally
be made subject to the legislation of one of the Member States
concerned by reference to a set of criteria set out in order of
priority. The priority ensures that there is no conflict of laws
and that the principle of making contributions in the State of
employment is maintained. There is also a provision for a safe
amount of benefit to be paid if a Member State does not have all
of the details it needs to make a final award.
Guidance for Member States to decide where a person
The Commission and many Member States wanted
to have a provision in the implementing regulation to formalise
the factors that should be taken into account when there is a
dispute about the Member State of residence. The UK worked to
ensure that the text was as uncontroversial as possible. We have
succeeded in this as the text is based on existing case-law of
the ECJ and makes clear that the relevant criteria to be taken
into account depend on the circumstances of the individual case.
Collection of social security contributions
The current provisions are slightly amended
and in future an employer based in another Member State will have
an obligation to pay the appropriate employer's contribution.
At the moment this obligation only exists if the Member States
have an agreement to that effect. The UK has no such agreements.
Later in the negotiations Member States will discuss the actual
recovery provisions which will be necessary in order to enforce
the payment of contributions from employers in other Member States.
With the agreement of the incoming Finnish Presidency,
the Austrian Presidency started negotiations on the next chapters
directly after their Council. The Finnish Presidency decided to
concentrate on provisions relating to pensions, incapacity benefits,
and survivor's benefits during their Presidency, and Member States
were able to raise initial points of view in June. Discussions
continued in July and will start again in September. I mentioned
our concerns about a draft article relating to periods of child-raising
in my Supplementary memorandum (Article 44). First discussions
in June confirm that this is a proposal that will be among the
most controversial for the UK.
12 September 2006