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MEMO/12/234 Brussels, 30 March 2012 Communication on the External Dimension of EU Social Security Coordination and four proposals for Council Decisions On 30th March 2012, the European Commission put forward a package including a policy Communication on the External Dimension of EU Social Security Coordination, together with 4 proposals for Council Decisions on the EU position concerning social security coordination with Albania, Montenegro, San Marino and Turkey. Social Security Coordination: what is it? Social security systems are generally based on a territorial principle that means that social security benefits are paid only on the territory of that state and only social insurance contributions made in that state can be recognised for the payment of benefits. Social security coordination rules are a system of rules designed to create links between different national social security systems so as to minimise disadvantages for persons who move between different countries and different social security regimes. They deal with such issues as avoiding having to make double social insurance payments in the case of persons who work in more than one country; they also generally allow for a state pension acquired in one country to be paid on the territory of another country. Equal treatment is usually part of a social security coordination system. Social security is not harmonised in the EU. Each state is responsible for its own social security system. The EU therefore has its own internal regime of EU social security coordination, which has been in existence since 1959. It is currently contained in Regulations (EC) No 883/2004 and (EC) No 987/2009. For further information, see: http://ec.europa.eu/social/main.jsp?langId=en&catId=849 How is social security currently dealt with for workers who move in and out of the EU? Social security coordination with countries outside the EU is dealt with by means of bilateral social security agreements made between Member States and third countries. Such agreements often contain provisions that allow a worker from a third country to work in the EU country concerned but remain subject to the social security legislation of the sending state for a limited period of time. In addition, they can cover equal treatment in the system of the host state and payment of state pensions on the territory of the other state. Older agreements sometimes deal with reciprocal healthcare provision. Member States have only a limited number of such bilateral agreements; the content of the agreement varies from country to country; and there are very many third countries with whom no agreements exist. The Communication on the External Dimension of EU social security coordination: what does it aim to achieve? The Communication makes the point that, although there is an internal system of EU social security coordination rules, there is no real cooperation in respect of third countries (other than in respect of the EEA countries and Switzerland). This creates external "fragmentation", which causes barriers for businesses coming from third countries and a lack of transparency as to what migrants' rights are, both for EU workers working outside the EU and for migrants from third countries working in the EU. The Communication therefore suggests a number of ideas to encourage cooperation between the Member States in the field of social security coordination with third countries. What does the Communication propose? The Communication proposes a two-pronged approach. It underlines the need for better cooperation on national bilateral agreements and it promotes the development of a common EU approach. In general terms, it emphasises the need – consistent with the Europe 2020 strategy – for the EU to look outwards and to strengthen its external profile on social security issues. What is proposed as regards bilateral agreements? The Communication sets out a range of common practical and legal issues that arise for Member States in the application of their bilateral agreements. It makes the case for more cooperation when concluding, reviewing and applying these agreements. To facilitate this, it proposes a new forum at EU level for cooperation between Member State experts who deal with such bilateral agreements. How can the EU develop a common approach? There is already a common EU approach to social security coordination contained in provisions agreed in association agreements made between the EU, its Member States and certain third countries. In 2010 the Council agreed on the EU position for the implementation of the social security coordination provisions in relation to the Association Agreements made with Algeria, Morocco, Tunisia, Croatia, the Former Yugoslav Republic of Macedonia and Israel. The Communication proposes the adoption of four more Council Decisions - so as to implement the social security coordination provisions in agreements made with Turkey, Albania, Montenegro and San Marino. These proposals for Council decisions to agree the EU position have been adopted at the same time as the Communication. What are Council Decisions on the EU position? The proposals for the EU position are proposals that are based on obligations contained in EU association agreements with the countries concerned (in the case of San Marino it is based on a Customs and Cooperation Agreement). In each of the agreements an undertaking was given to implement a set of limited social security coordination rules between EU Member States and the third country concerned. The first step toward the adoption of this set of rules is the adoption of the EU position by the Council. After the EU position is agreed, the second step is to reach agreement with each country on the adoption of a Decision by the relevant EU Association Council with that country (in the case of San Marino, this is called the Cooperation Committee). Decisions of these bodies are part of the EU legal acquis and can be directly applied as part of national law. 2 Does the Commission propose the same EU position in respect of all countries? Yes, the proposals are more or less identical. There is a small variation as regards social security benefits covered: this arises from what was agreed in the Association Agreement with the country concerned. This unified approach will facilitate an easier application of the rules by social security administrators in the Member States. Why has a proposal been made for Turkey – there is already an existing Decision 3/80 on social security coordination with Turkey? The proposal for the EU position concerning social security coordination with Turkey is intended to replace and modernise the existing Decision 3/80 of the EEC-Turkey Association Council on social security coordination. Decision 3/80 has never been legislatively implemented, despite having been given partial effect as a result of judgments of the Court of Justice. The new decision proposed aims to bring legal certainty as regards the pension rights of Turkish workers, who have worked in the EU and then return to Turkey. It also adds reciprocal rights for EU workers, who have worked in Turkey. Is the approach to Turkey different to that taken to the other countries? No, the position proposed vis-à-vis Turkey is more or less identical to that proposed for the other countries that are part of the same package. It also mirrors the position adopted by the Council in October 2010 in respect of social security coordination with Algeria, Croatia, Israel, Morocco, the former Yugoslav Republic of Macedonia and Tunisia. The Communication also proposes EU social security agreements: what are these? The Communication proposes that Member States consider whether they wish to act jointly on social security coordination with selected third countries, mainly with the EU’s strategic partners, in particular those with whom there are significant movements of labour. The overall aim of such agreements would be to promote a coherent EU approach vis-à-vis the third country concerned. The agreement would, in contrast to association agreements, focus solely on social security issues. On what issues could such an EU social security agreement be made? The idea is to have a common approach to social security coordination with a third country. The agreement could cover the payment of social security contributions (both in the EU and in the third country concerned) and also the payment of state pensions outside of the territory of the paying state. 3