Project Description

A short introduction to EU social security coordination

Coordination of national social security schemes

The problem

Considering the many social security systems in existence worldwide, it was only logical that the question should arise in which state a person is socially insured in case of cross border activities and how social security systems should be coordinated. These questions are neither specific for the EU, nor do the answers diverge between the various jurisdictions. I will concentrate on the answers developed by the European Union, paying particular attention to the question of how the social security systems of international organizations fit in this scheme.

Regulation 1408/71, replaced by regulation 883/2004

The first general rules for the coordination of social systems in the European Economic Community were adopted in 1971: Regulation 1408/71. This regulation was the basis for the social security coordination for decades, only to be replaced by regulation 883/2004 in 2004.

The basic principle of the coordination can be found in Article 11(1) of regulation 883/2004: persons can only be subject to the social security legislation of a single Member State, the so-called principle of unicity. The rest of the regulation is, bluntly speaking, laying down specific rules for the implementation of this principle in specific situations.

Within the EU (as well as the European Economic Area and Switzerland) the rule is therefore clear: you can only be subject to one national social security scheme and you thus only pay contribution to that scheme, irrespective of where you work, what work you do, etc.

Addressing cross border situations

The general principle has been established, how to apply it to cross border situations?

First rule: a person living in one Member State but working in another Member State is subject to the legislation of the Member State in which he/she works.

In case of activities in several Member States, the regulation creates a priority between the different types of employment, whereby being a civil servant has the highest priority. Therefore, a civil servant is always socially insured in the Member State to which the administration employing him/her is subject, irrespective whether he/she is also employed or self-employed in another Member State. The next priority is being employed, which trumps self-employed. Thus a person employed in one Member State, is subject to the social security legislation of that Member State, irrespective whether he/she is self-employed in another Member State.

If a person pursues employment activities of the same level of priority in different Member States, the social security legislation of the Member State in which he/she resides is applicable in case a substantial part of the activity is pursued in that state; if this is not the case the regulation contains specific rules determining the competent Member State.

Cross border health insurance questions: coverage

The rules determining which social security situation is applicable can result in a situation in which a person is covered by the legislation of Member State A, while residing in Member State B. A simple example is a cross border worker, residing in (for instance) The Netherlands and being employed in Belgium: this person will be covered by the Belgian social security legislation only.

If the regulation had stopped there, the person concerned would not have any health care coverage in The Netherlands, simply because the social security legislation of The Netherlands is not applicable.

The solution found is rather ingenious: in case a person residing in one Member State is covered by the social security legislation of another Member State, this person is entitled to free registration with the health care system of the Member State of residence at the expense of the health care system of the Member State of coverage. Concretely, to use the example: Belgian competent authorities will give the person concerned a form S1, with which he/she can register for free with the health insurance scheme of The Netherlands, having access to all benefits of a person ensured under this scheme. The costs for this coverage in The Netherlands are reimbursed by the Belgian health insurance scheme, to which the person concerned pays contributions.

A similar scheme applies to those who are retired: they remain covered and pay contributions to the health insurance scheme of the Member State that is responsible for the payment of their pension; in the Member State of residence, they can enjoy free coverage by the local health insurance scheme.

Cross border health insurance questions: treatment

To complete the picture a few words about the EHIC and cross border planned hospital care.

The European Health Insurance Card (EHIC) is issued by the health insurance scheme of the competent Member State, providing the holder access to emergency care in all Member States on the same basis as a person covered by the local health insurance scheme. The costs for this treatment are reimbursed by the health insurance scheme of the competent Member State.

A similar scheme existing for planned cross border hospital care, which has to be authorized by the health insurance scheme of the competent Member State. This authorization entitles the holder to hospital care in another Member State.

How do social security schemes of international organizations fit in ?

Regulation 883/2004 as well as similar international instruments only cover the coordination of social security schemes set up by states, not the social security schemes of international organizations.

This does generally not pose a too big problem, because unlike national schemes, the schemes of international organizations provide a worldwide coverage, but a number of tricky questions remain, the unicity being the most pressing one.

Some solutions

The rules on privileges and immunities of international organizations as well as the various headquarter agreements have found different solutions for the unicity problem. Some text provide that those covered by the social security scheme of the respective international organization cannot be covered by the respective national schemes, while other text either remain silent or allow double coverage in case the international civil servant is (self) employment alongside to his job as international civil servant.

Host states have also adopted a range of national provisions, ranging from fully subscribing to the principle of unicity to allowing double coverage.

EU law

The Protocol on Privileges and Immunities of the EU is silent on the unicity question: Article 14 merely provides that the legislator shall adopt a social security scheme for EU staff. In addition, the case law did until recently not addressed this question explicitly.

A landmark case

In its landmark judgement landmark judgement C-690/15 of 10 May 2017 (Wenceslas de Lobkowicz), the Court of Justice settled the question by ruling that Article 14 of the Protocol and the provisions of the Staff Regulations on social security for EU officials fulfil, in respect of those officials, a function that is similar to that which Article 13 of Regulation No 1408/71 and Article 11 of Regulation No 883/2004 fulfil, in that they prohibit any obligation on EU officials to contribute to several schemes in this field.

National legislation, which subjects the income of an EU official to contributions and social levies specifically allocated for the funding of the social security schemes of the Member State concerned, therefore infringes the exclusive competence of the European Union under Article 14 of the Protocol and the relevant provisions of the Staff Regulations, in particular those which prescribe mandatory contributions to the funding of a social security scheme by EU officials.

The principle of unicity therefore applies in full to EU staff members as well as retired staff members covered by the joint sickness insurance scheme. Consequently, EU staff members cannot be covered by national social security schemes in the Member States nor can they be asked to pay any social security contributions. This applies irrespective whether the staff member is engaged in employed or self-employed activities alongside to his/her EU employment.

Spouses and children of EU staff members can only be covered by the EU health insurance scheme, either in primary or supplementary coverage. Therefore, an exemption of national health insurance coverage can only be granted of the spouse or child is in primary coverage.

What about other international organizations

The aforementioned case of law of the Court of Justice only binds the Member States and only refers to staff of the European Union, but the implications can be wider. A close reading of the judgement shows that the court is of the opinion that the social security systems of international organizations can be of such a nature (mainly depending on the extend of the coverage), that the generally recognized principle of unicity should also apply to schemes set up by international organizations.

Therefore, while formally not extending beyond the scope of the EU social security scheme, the judgement can certainly serve as inspiration for legislators and judges when confronted with the question whether and to which extend those covered by the social security schemes of international organizations should be exempted from national social security schemes.

Closing remarks

International social security coordination is generally not a too relevant topic for international civil servants, but it forms one of the pillars of the free movement of persons, whether within or outside the EU/EEA.

Niels Bracke

Having started his international career in the General Secretariat of the Council (DG Justice and Home Affairs), he joined the EEAS in 2011. Presently he is full time seconded to Union Syndicale as coordinator of US in the EEAS. Being a member of the management committee of the Joint Sickness Insurance Scheme, he is dealing on a daily basis with questions related to the EU health insurance scheme.

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