Select Committee on European Union Fortieth Report

SOCIAL SECURITY SYSTEMS (5896/06, 9584/06)

Letter from the Chairman to James Plaskitt MP, Parliamentary Under-Secretary of State, Department for Work and Pensions

  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 MP

  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 long term.

  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 is resident

  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

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