EU Social Security Law: A Commentary on EU Regulations 883/2004 and 987/2009 9781509909537, 9781509903672

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Preface Social security coordination constitutes a cornerstone of the European Union. The fact that the social security schemes of the Member States differ widely makes their coordination on the European level a complicated matter. In the wake of the extension of the EU to new Member States during the first decade of the new millennium a new legal base was created for EU social security coordination. Regulation (EC) No. 883/2004 and the Implementing Regulation (EC) No. 987/2009 replaced the former Regulation (EEC) No. 1408/71 and the Implementing Regulation (EEC) 574/72. These Regulations are of importance to the overwhelming majority of EU citizens. In fact, they offer protection to all EU workers, and to the members of their families and their survivors, who cross the internal borders of the Union be it for professional or private reasons. The appearance of this commentary comes at a good moment in a period characterized by a heated debate in many Member States about access to benefits for workers and non-active persons coming from other Member States. This commentary provides explanatory comments, Article by Article of the current Regulations mentioned above. In doing so, it highlights, in a systematic way, the spirit and purpose of the Articles. It presents the relevant case-law of the Court of Justice of the European Union and includes the relevant Decisions and Recommendations of the Administrative Commission. The commentary extends to related instruments, such as the importance of the EEA Agreement, the EUSwitzerland Agreement on free movement of persons, and the Association Agreement with Turkey for social security coordination. The law of EU social security coordination is stated as on 1st June 2015. Maximilian Fuchs

Rob Cornelissen

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Contributors Karl-Jürgen Bieback, Professor of Law, University of Hamburg Art. 17-22, 31-35 Reg. No. 883/2004 Rob Cornelissen, Guest-Professor of Law, University of Brussels and former senior staff member of the European Commission, Brussels Introduction, Art. 71-91 Reg. No. 883/2004, Special Rules of the IR Maximilian Fuchs, Professor of Law, Catholic University of Eichstätt-Ingolstadt Introduction, Art. 3, 9, 36-43, 61-66, 70 Reg. No. 883/2004 Bettina Kahil-Wolff, Professor of Law, University of Lausanne Art. 1, 4 Reg. No. 883/2004, Association Agreements Rose Langer, Head of Directorate, Federal Ministry of Labour and Social Affairs, Berlin Art. 45, 48 TFEU Franz Marhold, Professor of Law, Vienna University of Economics and Business Art. 67-69 Reg. No. 883/2004 Rolf Schuler, Judge, Landessozialgericht, Darmstadt Art. 5-7, 10, 23-30, 44-60 Reg. No. 883/2004 Bernhard Spiegel, Professor, Federal Ministry of Labour, Social Affairs and Consumer Protection, Vienna Art. 2 Reg. No. 883/2004 Heinz-Dietrich Steinmeyer, Professor of Law, University of Münster Art. 8, 11-16 Reg. No. 883/2004 Citation Remark: Articles without reference are those of Reg. No. 883/2004.

XI

List of Abbreviations AG

Advocate General

Art.

Article

BGBl.

Bundesgesetzblatt

BTSZ

Belgisch Tijdschrift voor Sociale Zekerheid (The same articles are published in French by RBSS)

CDE

Cahiers de Droit Européen

cf

see, compare

CFI

Court of First Instance

CJEU

Court of Justice of the European Union

C.M.L.R.

Common Market Law Reports

CMLRev

Common Market Law Review

Dr. Soc.

Droit Social

DVBl.

Deutsches Verwaltungsblatt

EBLR

European Business Law Review

EC

European Community

ECHR

European Court of Human Rights

ECLR

European Competition Law Review

ECR

European Court Reports

ed.

Editor

EEA

European Economic Area

EFTA

European Free Trade Association

EJIL

European Journal of International Law

EJML

European Journal of Migration and Law

EJRR

European Journal of Risk Regulation

EJSL

European Journal of Social Law

EJSS

European Journal of Social Security

ELJ

European Law Journal

E.L.Rev.

European Law Review

EP

European Parliament

ESC

European Social Charter

et al

and others

et seq.

following

EU

European Union

XIII

List of Abbreviations

EuGRZ

Europäische Grundrechte-Zeitschrift

EULF

The European Legal Forum

EuZW

Europäische Zeitschrift für Wirtschaftsrecht

ibid.

cited in preceding footnote

ILO

International Labour Organization

infra

see below

IR

Implementing Regulation, Reg. No. 987/2009

JCMS

Journal of Common Market Studies

JTT

Journal des Tribunaux du Travail (containing mainly articles in French, some articles in Dutch)

NATO

North Atlantic Treaty Organization

NJW

Neue Juristische Wochenschrift

NZS

Neue Zeitschrift für Sozialrecht

OJ

Official Journal

OMC

Open Method of Coordination

p.

page/s

para.

Paragraph

RAE

Revue des Affaires Européennes

RBSS

Revue Belge de sécurité sociale (The same articles are published in Dutch by BTSZ)

RDSS

Revue de droit sanitaire et social

REDS

Revue européenne du Droit Social

Reg.

Regulation

RISS

Revue international de sécurité sociale

RMC

Revue de l’Union Européenne (former Revue du marché commun)

RSV

Rechtspraak Sociale verzekeringen (Case-law in social security)

RTDE

Revue trimestrielle de droit européen

SEW

Tijdschrift voor Europees en economisch recht (Journal for European and economic law)

SGb

Die Sozialgerichtsbarkeit

supra

see above

SZS

Schweizerische Zeitschrift für Sozialversicherung und berufliche Vorsorge

XIV

List of Abbreviations

TEU

Treaty on European Union

TFEU

Treaty on the functioning of the European Union

TRA

Tijdschrift voor Recht en Arbeid (merging in 2009 the old Journals SMA (Sociaal Maandblad Arbeid) en Tijdschrift voor Sociaal Recht)

TSR/RDS

Tijdschrift voor social recht – Revue de droit social (Articles in Dutch or French with only a short summary in the other language)

ZESAR

Zeitschrift für Europäisches Sozial- und Arbeitsrecht

ZIAS

Zeitschrift für ausländisches und internationales Arbeitsund Sozialrecht

XV

Introduction Bibliography Monographies: Caldarini/Giubboni/Mackay, Il “posto” del lavoro atipico nel coordinamento dei sistemi di sicurezza sociale in Europa. Un’analisi comparativa transnazionale, WP C.S.D.L.E. “Massimo D’Antona” – Collective Volumes – no. 2/2014; Devetzi, Die Kollisionsnormen des Europäischen Sozialrechts, 2000; Eichenhofer, Sozialrecht der Europäischen Union, 5th ed. 2013; Eichenhofer (ed.), EU-Sozialrecht, 5th leaflet March 2015; Essers/Van der Mei/Van Overmeiren (eds.), Vrij verkeer van personen in 60 arresten, 2012; Hanau/Steinmeyer/Wank, Handbuch des europäischen Arbeits- und Sozialrechts, 2002; Hatje/Huber (eds.), Unionsbürgerschaft und soziale Rechte, EuR Europarecht, leaflet 1/2007; Höller, Soziale Rechte Drittstaatsangehöriger nach europäischem Gemeinschaftsrecht, 2005; Jorens (ed.), Europese detachering en vrij verkeer van diensten, 2009; Jorens/de Schuyter/Salamon, Naar een rationalisatie van de EG-Coördinatieverordeningen inzake sociale zekerheid?, 2005; Kessler/Lhernould, Code annoté européen de la protection sociale, Groupe Revue Fiduciaire, 4th ed. 2010; Marhold (ed.), Das neue Sozialrecht der EU, 2005; Mavridis, La sécurité sociale à l’épreuve de l’intégration européenne, 2003; Miranda Boto, Las competencias de la Comunidad Europea en materia social, 2009; Morsa, Sécurité sociale, libre circulation et citoyenneté européennes, 2012; Nogueira Guastavino/Fotinopoulou Basurko/Miranda Boto (eds.), Lecciones de derecho social de la Unión Europea, 2012; Obermaier, The End of Territoriality? The Impact of ECJ Rulings on British, German and French Social Policy, 2012; Pennings, European Social Security Law, 6th ed. 2015; Pennings (ed.); Special Issue on 50 Years of European Social Security Coordination, EJSS 2009; Rodière, Droit social de l’Union Européenne, 3rd ed. 2008; Runggaldier, Grundzüge des europäischen Arbeitsrechts und des europäischen Sozialrechts, 2004; Schrammel/Winkler, Europäisches Arbeits- und Sozialrecht, 2010; Schreiber/Wunder/Dern, VO (EG) Nr. 883/2004, commentary, 2012; Shaw (ed.), Social Law and Policy in an Evolving European Union, 2000; Spiegel (ed.), Zwischenstaatliches Sozialversicherungsrecht, commentary, 50th leaflet 2014; Van Overmeiren, Cives Europaei sociales sumus: additionele welvaartsrechten door het burgerschap van de Unie, 2011; Van Regenmortel/Verschueren/Vervliet (eds.), Sociale zekerheid in het Europa van de markt en de burgers, enkele actuele thema’s, 2007; Verschueren, Werken over de grens België-Nederland, sociaal en fiscaalrechtelijke grensconflicten, 2011; Watson, EU Social and Employment Law, 2009. Essays in journals and books: Behrend, Soziale Rechte entsandter Arbeitnehmer aus den EUMitgliedstaaten, ZESAR 2012, 55 et seq.; Beschorner, Die beitragsunabhängigen Geldleistungen i.S.v. Art. 4 Abs. 2 a VO (EWG) Nr. 1408/71 in der Rechtsprechung des EuGH, ZESAR 2009, p. 320 et seq.; Bokeloh, Das Petroni-Prinzip des Europäischen Gerichtshofs, ZESAR 2012, p. 121 et seq.; Bokeloh, Die Übergangsregelungen in den Verordnungen (EG) Nr. 883/04 und 987/09, ZESAR 2011, p. 18 et seq.; Borzaga, La libera circolazione dei lavoratori autonomi e le questioni previdenziali, in: Nogler (ed.), Le attività autonome, Trattato di diritto privato dell’Unione europea, vol. VI, 2006, p. 125 et seq.; Chiaromonte, Attività lavorative transnazionali e legislazione applicabile: recenti orientamenti della Corte di Lussemburgo, in: Rivista del diritto della sicurezza sociale, 2014, no. 4 of 2014, p. 595-608; Cornelissen, Third-Country Nationals and the European Coordination of Social Security, EJSS 2008, p. 347-372; Cornelissen, Europees socialezekerheidsrecht, in: Put/Verdeyen (eds.), Onwtikkelingen in de sociale zekerheid 2006-2011, 2011; Devetzi, Auswirkungen der Wohnsitzverlegung auf den sozialrechtlichen Leistungsexport in Europa, ZESAR 2009, p. 63 et seq.; Edler, Die Kollisionsnormen der VO 1408/71 für Selbständige, ZESAR 2003, p. 156 et seq.; Fillon, Un premier bilan sur la coordination des régimes de sécurité sociale, Liaisons Sociales Europe

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Introduction 2011, No. 281, 30 June 2011; Fillon, Coordination des systèmes de sécurité sociale dans l’Union européenne: principes, législation applicable et dispositions générales, Bulletin Social Francis Lefebre, May-July 2015; Fuchs, Koordinierung oder Harmonisierung des europäischen Sozialrechts?, ZIAS 2003, 379 et seq.; Fuchs, Luxemburg locuta – causa finita – quaestio non soluta, NZS 2002, p. 337 et seq.; Fuchs, VO (EG) 883/2004, 33 ff., in: Kreikebohm/ Spellbrink/Waltermann (eds.), Kommentar zum Sozialrecht, 2011; Giubboni, Free Movement of Persons and European Solidarity, European Law Journal 13, no. 3, 2007, p. 360-379; Giubboni, La sicurezza sociale dei lavoratori che si spostano all’interno dell’Unione europea, in: Sciarrra/Caruso, Il lavoro subordinato, Trattato di diritto privato dell’Unione europea, vol. V, 2009, p. 585 et seq.; Giubboni, Coordinamento europeo della sicurezza sociale e regimi di previdenza complementare, in: Rivista del diritto della sicurezza sociale, 2010, p. 193-212; Giubboni, Libera circolazione delle persone, prestazioni familiari e regole comunitarie anticumulo, in: Rivista italiana di diritto del lavoro, 2010, II, p. 486-492; Giubboni, Il diritto alla sicurezza sociale tra frontiere nazionali e solidarietà europea, su Gli Stranieri, 2012, no. 2, p. 61-71; Giubboni, Il lavoro atipico nei regolamenti europei di sicurezza sociale, in Rivista del diritto della sicurezza sociale, no. 4 of 2013, p. 693-710; Giubboni/Chiaromonte, I regolamenti europei di sicurezza sociale nella recente giurisprudenza della Corte di giustizia, in: Rivista giuridica del lavoro, no. 3 of 2014, p. 481-512; Hailbronner, Union citizenship and access to social benefits, CMLRev 42, 2005, p. 1245 et seq.; Horn, Die Kollisionsnormen der VO (EWG) 1408/71 und die Rechtsprechung des EuGH, ZIAS 2002, p. 120 et seq.; Horn, Das Übergangsrecht nach den VO (EG) Nr. 883/2004 und 987/2009, SGb 2012, p. 70 et seq.; Jorens/De Pauw, Nieuwe vormen van mobiliteit en sociale zekerheid, BTSZ 2011, p. 421-461; Kahil-Wolff, Made in the EU, to consume in Switzerland, ZESAR 2014, 51; Kessler, Le nouveau droit communautaire de la sécurité sociale, Revue de droit sanitaire et sociale 2010, p. 3; Lhernould, Conflits de lois en matière de sécurité sociale: la lex loci laboris en question, Droit Social, May 2015; Lhernould, Coordination des systèmes nationaux de sécurité sociale (principes), Encyclopédie „Juris-Classeur“, Collection protection sociale, Fasc. 212-10 and 212-20; Mavridis, La libre circulation des patients: la bouche est-elle bouclée?, Petites Affiches, 2008, No. 119; Mavridis, L’assimilation des faits en droit communautaire: un nouveau principe?, Revue de droit sanitaire et sociale, 2011, p. 629; Merz/Gutzler, Das Sozialrecht auf dem Weg von den römischen Verträgen zum Lissabon-Vertrag, SGb 2011, p. 65 et seq.; Morsa, La coordination des systèmes de sécurité sociale. Règlements (CE) 883/2004 et 987/2009 versus règlements 1408/71 et 574/72: ce qui a changé le 1er mai 2010, JTT 2011, p. 181-92; Morsa, Les migrations internes à l’Union européenne sont-elles motivées par un accès à des prestations sociales? Citoyenneté européenne, liberté de circulation et de séjour des inactifs et droits sociaux. La relation entre la coordination européenne et la directive 2004/38, JTT 2014, p. 245-253; Paskalia, Co-ordination of social security in the European Union, CMLRev 2009, 1177; Pennings, Co-ordination of social security on the basis of the state-of-employment principle: Time for an alternative?, Common Market Law Review 42, 2005, p. 67-89; Pieters/Schoukens, De nieuwe Europese verordeningen 883/2004 en 987/2009, in: Hendrickx/Simoens (eds.), Arbeids- en socialezekerheidsrecht, 2011; Pieters/ Schoukens/VanLeuffel/Zaglmayer, Europees socialezekerheidsrecht: wetgeving en rechtspraak, in: Put/Simoens/Ankaert (eds.), Ontwikkelingen van de sociale zekerheid 2001-2006, 2006; Roger, Protection sociale des migrants: règlements (CE) 883/2004 et 987/2009, Bulletin Social Francis Lefebre, May and June 2010; Schulte, Allgemeine Regeln des internationalen Sozialrechts – Supranationales Recht, in: von Maydell/Ruland/Becker (eds.), Sozialrechtshandbuch (SRH), 4th ed. 2008 § 33; Schulte, Die neue europäische Sozialrechtskoordinierung (part I), ZESAR 2010, p. 143 et seq., (part II), ZESAR 2010, p. 202 et seq.; Spiegel, Die neue europäische Sozialrechtskoordinierung, ZIAS, 2006, p. 85 et seq.; Verschueren, Vrij verkeer van personen in de EU en de sociale minimumuitkeringen van de lidstaten: op zoek naar een evenwicht, BTSZ 2013, p. 93-116; Verschueren, Preventing “Benefit tourism” in the

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Introduction EU: a narrow or broad interpretation of the possibilities offered by the ECJ in Dano, CMLR 2015, p. 363-390; Voigt, Die Reform des koordinierenden europäischen Sozialrechts, ZESAR 2004, p. 73 et seq. (part 1), 121 et seq. (part 2). I. European social law – a definition of terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. European social law in a broader sense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. European social law in a narrower sense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. The development of European social law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. The socio-political ideas behind the Treaties of Rome . . . . . . . . . . . . . . 2. Origins and development of social security coordination law. . . . . . . a) Regulations (EEC) No. 3 and 4 on social security for migrant workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Reg. No. 1408/71 and No. 574/72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Further development of Reg. No. 1408/71. . . . . . . . . . . . . . . . . . . . . . . . . d) Reg. No. 883/2004 and Reg. No. 987/2009. . . . . . . . . . . . . . . . . . . . . . . . III. The legal basis of coordination law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. The law of social security coordination – its concern and purpose 2. Personal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Territorial scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Temporal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Role and basic principles of social security coordination law. . . . . . . a) Determination of a single applicable legislation . . . . . . . . . . . . . . . . . b) The prohibition of discrimination against other EU nationals. . . c) Principle of aggregation of insurance periods . . . . . . . . . . . . . . . . . . . . d) Equal treatment of facts and events (principle of assimilation). . e) Principle of the export of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 4 6 6 8 8 12 15 16 22 22 25 28 31 34 37 38 43 46 49 50

I. European social law – a definition of terms 1. European social law in a broader sense

It is possible to understand social law and indeed European social law in a 1 broad, substantive sense. In its simplest formulation, social law can be defined as a legal form of social policy. This view of social law has been adopted in particular in socio-political aca- 2 demic literature (cf. Hervey, European Social Law and Policy, 1998). This conception of social law also shapes the abundant work that is concerned in one way or another with the “social dimension” of European integration (cf. for example Kuhn, Die soziale Dimension der Europäischen Gemeinschaft, 1995). In French academic work the dominant conception of European social law in- 3 cludes both social security coordination law and labour law (cf. Lyon-Caen/ Lyon-Caen, Droit social international, 8th ed. 1993; Rodiere, Droit social de l’Union Européenne, 3rd ed.2008). Spanish authors also adopt this approach (cf. Miranda Boto, Las competencias de la Comunidad Europea en materia social, 2009). 2. European social law in a narrower sense

It may be the case that the broader definition of social law is the appropriate 4 method with which to approach an examination of primarily socio-political isMaximilian Fuchs/Rob Cornelissen

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sues. However, in the context of this Commentary, the term social law is based on a different, narrower definition. It shares an institutional element with the broader view. European social law should be understood as including only those rules laid down by the EU. In contrast to a more comprehensive perspective, the European social law that is dealt with here is limited to the set of social security rules that are linked to the free movement of Union citizens. In other words European labour law is excluded. European social law understood in this way could be approximated to a definition involving all rules made by the EU that influence the shape of the welfare law of the Member States (Eichenhofer, Sozialrecht der Europäischen Union, 5th ed. 2013 para. 5). 5 Based on such an interpretation of European social law, this Commentary limits itself to the so-called social security coordination law, created as a requirement of Art. 48 TFEU. The legal sources commented upon are therefore: – Regulation (EC) 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ L 166/1 of 30 April 2004) – Regulation (EC) 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) 883/2004 on the coordination of social security systems (OJ L 284/1 of 30 October 2009) II. The development of European social law 1. The socio-political ideas behind the Treaties of Rome 6

Current European social law is the result of historical development, the roots for which are to be found in the conclusion of the Treaties of Rome in 1957 (a concise but instructive presentation of the history of the development of European social law can be found in Eichenhofer, Sozialrecht der Europäischen Union, 5th ed. 2013, para. 9 et seq.). In the preliminary negotiations there were considerable differences of opinion concerning the role of social policy and therefore also of social law. These differences were reflected in particular in the varying positions taken by the German and French delegations. The chief French negotiators regarded social harmonisation as a key requirement for the establishment of the Common Market: if socio-political rules in the individual Member States were aligned this would ensure equal burdens for businesses; only in this way could a level playing field within the Community be created. France feared in particular that French products would be competitively disadvantaged as a result of its legislation which provided equal pay for men and woman and in addition holiday and overtime entitlements that were far more generous than in other countries. The German delegation on the other hand was of the opinion that social benefits should not be regarded as artificial costs (created by the legislator), but rather as natural location-related costs that would in no way result in a distortion of competition and that therefore did not require alignment by means of 4

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harmonisation (see Barnard, EU employment law, 4th ed. 2012, p. 3 et seq.). The principle of equal pay for men and women was the only item adopted by the EEC Treaty. The Spaak report, which acted as a guiding principle for the conclusion of the 7 Treaties of Rome, regarded the establishment of a European labour market as being key to the realisation of the Common Market (cf. in this respect O’Leary, Free Movement of Persons and Services, in: Craig/De Búrca (eds), The Evolution of EU Law, 2nd ed. 2011, p. 503). For this reason in order to achieve an efficient allocation of resources, the free movement of workers had to be given high priority. A flow of labour was expected to move from low-wage countries to higher-wage countries, leading to a balancing of the marginal productivity of labour within the economic area. The key objective of the freedom of movement rules was therefore not regulatory intervention, but rather to enable the greatest possible mobility of labour as a factor of production (Oppermann/Classen/ Nettesheim, Europarecht, 6th ed. 2014, § 27 para. 1). It was for this reason that a significant section concerning the free movement of workers was incorporated into the EEC Treaty. Walter Hallstein, the first president of the Commission wrote in this respect (cf. Hallstein, Die Europäische Gemeinschaft, 1979, p. 170): “It is no coincidence that the only piece of social policy where the details had to be worked out (as opposed to being predetermined), namely the free movement of workers, is to be found in the “foundations of the Community” part of the Treaty, which deals with the four “fundamental freedoms” ... Achieving a level playing field for business plays a large role in this. In addition, providing a Treaty basis for free movement is the natural approach to achieving mobility of the factors of production. 2. Origins and development of social security coordination law a) Regulations (EEC) No. 3 and 4 on social security for migrant workers

Art. 69 § 4 of the Treaty establishing the European Coal and Steel Communi- 8 ty of 18.4.1951 (BGBl. 1952, II, 447) obliged all Member States to prohibit all forms of discrimination in remuneration and working conditions between national workers and migrant workers, without prejudice to special measures concerning frontier workers; in particular, it set out that they should endeavour to settle among themselves any matters remaining to be dealt with so that social security arrangements did not inhibit labour mobility. Art. 69 § 5 of the Treaty establishing the ECSC regarded it as the task of the High Authority to guide and facilitate action by the Member States in applying Article 69. In order to execute this task the High Authority recommended the conclusion of an agreement concerning social security and this recommendation was adopted by the Member States at the beginning of 1954. The resulting agreement was intended as far as possible to replace and coordinate existing agreements, to remove any gaps or

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shortcomings in the former agreements and to regulate directly relationships between Member States which had not so far concluded any bilateral agreements. 9 An expert committee, with the support of the International Labour Office, developed a European Agreement concerning the Social Security of Migrant Workers that was signed in Rome on 9.12.1957 by the governments concerned. Since Art. 51 of the EEC Treaty (now Art. 48 TFEU = Art. 42 EC) set out within the framework of the European Economic Community the same task of coordination of social security as Art. 69 § 4 of the Treaty establishing the ECSC had done previously, the Commission suggested in 1958 that the European Economic Community convert the European Agreement concerning the Social Security of Migrant Workers into a Council Regulation on the basis of Art. 51 of the EEC Treaty (van Raepenbusch, La sécurité sociale des personnes qui circulent à l’intérieur de la Communauté Economique Européenne, 1991, p. 104). 10 The Council followed this suggestion and passed a slightly modified version of the European Agreement in the form of Reg. (EEC) No. 3 concerning the social security of migrant workers (OJ (EEC) No. 561/58 of 16.12.1958). In the recitals it is pointed out that the agreement meets the objectives of Art. 51 EEC Treaty and that its provisions can therefore be adopted in a regulation, subject to the necessary adjustments. The High Authority declared at the same time that the new Regulation would replace the earlier rules based on Art. 69 § 4 of the Treaty establishing the European Coal and Steel Community. Not long after this the Council of the European Economic Community passed Reg. (EEC) No. 4 that laid down the procedure for implementing and completing Reg. (EEC) No. 3 concerning the social security of migrant workers (OJ (EEC) No. 561/58 of 16.12.1958). According to the recitals of this Regulation, it was intended to facilitate the practical application of the principles laid down in Reg. (EEC) No. 3, in particular to designate the competent institution in each Member State that was responsible for applying the Regulation, to set out the documentation to be submitted and formalities to be completed by beneficiaries and to regulate the details of the administrative and medical checks. 11 Reg. (EEC) No. 3 established a standard for social security coordination rules and thus laid the cornerstones of modern social security coordination, the essential contents of which remain in place today (see van Raepenbusch, La sécurité sociale, p. 102 et seq. for a brief summary of the contents of Reg. (EEC) No. 3). As the term “migrant worker” indicates, the personal scope of Reg. (EEC) No. 3 was only to apply to workers and equivalent groups of persons. Public servants and other groups of workers were excluded. In its material scope Reg. (EEC) No. 3 interpreted the term “social security” in a broad sense, although it expressly excluded from its scope social assistance, benefits for victims of war, as well as civil service schemes. The Reg. contained a guarantee of equal treatment with regard to nationals of the Member States. Of particular importance was the new requirement to export social security benefits from one Member State to another. It is clear from its Articles 5 to 7, that Reg. (EEC) No. 3 was based on the Euro-

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pean Agreement (cf in this respect van Raepenbusch, La sécurité sociale des personnes qui circulent à l’intérieur de la Communauté Economique Européenne, 1991, p. 104). For this reason Reg. (EEC) No. 3 did not lead to a complete abolition of former bilateral and multilateral social security agreements. Rather, provided certain conditions were fulfilled, such agreements could remain in place and new ones could be concluded. b) Reg. No. 1408/71 and No. 574/72

Reg. (EEC) No. 3 was subsequently amended many times. Despite numerous 12 decisions of the Administrative Commission and important judgments of the CJEU the need for a fundamental revision became ever more apparent. From at the latest 1963 work started on the task of preparing a revision. This work involved the Commission of the European Economic Community, the Administrative Commission on Social Security for Migrant Workers, the European Parliament, the Economic and Social Committee and finally, as the competent legislative body, the Council of the European Economic Community (for details of the work on the revision see Pompe, Leistungen der sozialen Sicherheit bei Alter und Invalidität für Arbeitnehmer nach Europäischem Gemeinschaftsrecht, 1986, p. 44 et seq.) This preparatory work led to Reg. No. 1408/71 of the Council of 14.6.1971 13 on the application of social security schemes to employed persons and their family members moving within the Community (OJ (EC) No. L 149 of 5.7.1971) and Reg. No. 574/72 of the Council of 21.3.1972 laying down the procedure for implementing Reg. No. 1408/71. Both Regulations came into force on 1.10.1972, replacing Regs. (EEC) No. 3 and 4. The objective of Reg. No. 1408/71 was to extend, improve and at the same 14 time somewhat simplify the body of coordination rules, while taking into account the large differences that still existed between the national social security regimes. In addition, practical experience gained through the application of Reg. (EEC) No. 3 was to be incorporated into the regulation and the case-law of the CJEU taken into consideration. It also aimed to take account of the particularities of the new Member States (the United Kingdom, Ireland and Denmark). One of the most important amendments made to Reg. No. 1408/71, in addition to the other numerous individual amendments it contained (for a more detailed explanation of the amendments see Pompe, Leistungen der sozialen Sicherheit bei Alter und Invalidität für Arbeitnehmer nach Europäischem Gemeinschaftsrecht, 1986, p. 47 et seq.), was the extension of the term “employed person” in Art. 1(a). In other respects, the fundamental concepts of Reg. (EEC) No. 3 remained. This was also the case for Reg. No. 574/72, although, in comparison to Reg. (EEC) No. 4, this in fact made significant amendments to simplify administrative and financial procedures.

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c) Further development of Reg. No. 1408/71 15

Over time it became more and more evident that corrections were needed to Reg. No. 1408/71. This was primarily due to the accession of new Member States. Moreover, the case-law of the European Court of Justice also gave rise to the need for amendments. One of the most notable amendments was the extension of the personal scope of the Regulation to include self-employed persons (effected by Reg. No. 1390/81 of 29.5.1981, OJ (EC) No. L143/1). The inclusion of special schemes for civil servants and people treated as such in the scope of Reg. No. 1408/71 deserves particular mention (effected by Reg. No. 1606/98 of 29.6.1998, OJ L 209 (EC) No. L 209/1) as does the inclusion of students (cf Reg. No. 307/1999 of 8.2.1999, OJ (EC) No. L 038/1). The progressive differentiation between the Member States’ welfare systems led to new provisions for special non-contributory cash benefits (dealing with the conditions for classification and the legal effects of such) (initially in Reg. No. 1247/92 (OJ (EC) No. L 136) and subsequently in Reg. No. 647/2005 (OJ (EC) No. L 117/1). By the 1990 s the need for a fundamental revision of Reg. No. 1408/71 was generally recognised. The work towards a fundamental reform concluded successfully with the adoption of Reg. No. 883/2004 (see in this respect para. 34 et seq). d) Reg. No. 883/2004 and Reg. No. 987/2009

16

The history of European social security coordination law is also a history of continuous reform. Reg. (EEC) No. 3 was amended 15 times and Reg. No. 1408/71 39 times. This can be explained on the one hand by the continuous development of the Member States’ welfare systems and on the other hand by the fact that numerous other states over the course of time joined the original six EEC Member States and brought their social security schemes with all their peculiarities into the fabric of coordination. The co-existence of two types of social security systems, which can be labelled as “Bismarck-“ or “Beveridge” systems, clearly made the task of coordination more difficult. Added to this was the effect of the progressive privatisation of social security (cf. in this respect Langer, ZIAS 1997, 314 et seq.). As the problems that arose could not always be solved immediately with legislative amendments to the coordination Regulation, the CJEU took on a key role in the further development of social security coordination law. Its decisions made numerous subsequent amendments to Reg. No. 1408/71 necessary (cf also Cornelissen, 50 Years of European Social Security Coordination, in: Eichenhofer (eds.), 50 Jahre nach ihrem Beginn - Neue Regeln für die Koordinierung sozialer Sicherheit, 2009, p. 17 (18) f). European social security coordination law was not only extremely complex in its design; it was also extremely complicated in the way it worked (Eichenhofer, Reform des europäischen Sozialrechts, in: Schulte/Barwig (eds.), Freizügigkeit und soziale Sicherheit, 1999, p. 397, 411). Legislative simplification of the legislation had therefore long been called for and was a paramount concern for any future

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amendment. As early as 1992 the Edinburgh European Council called for a general overhaul of the social security coordination legislation. In its “Action Plan for Free Movement of Workers” (COM (97) 586 final) the Commission confirmed the need for the modernisation and simplification of the regulations for coordinating social security systems. The work to simplify the coordination rules was given a decisive boost by the SLIM initiative that was launched in May 1996. SLIM (Simpler Legislation for the Internal Market) aimed at simplifying legislation in the internal market – cf Better lawmaking: ‘A shared responsibility’ (COM (1998) 715 final). In March 1998 the Commission announced the launch of the third phase of the SLIM initiative in which three areas, including social security, were examined (cf SEK (1998) 559). The SLIM team recommended three particular areas for reform: the scope of the coordination regulations (personal and material); the determination of applicable legislation; and the coordination of various categories of benefits. Already by the end of 1998 the Commission adopted a proposal for a new Regulation for the coordination of social security systems (COM (1998) 779 final). The centrality given to simplification by the proposal was demonstrated by the fact that the number of articles was reduced by two-thirds, compared to the version of Reg. No. 1408/71 in force at that time. At its meeting in Stockholm in March 2001 the European Council delegated 17 to the Council the task of setting by the end of 2001the parameters for the modernisation of Reg. No. 1408/71, the aim being to allow an amended Regulation to be adopted swiftly. The Council completed this task on 6.12.2001 (the parameters are set out and commented upon in part in Voigt, ZESAR 2004, 73, 74 f). The work to bring about this legislative reform culminated successfully in the adoption of Reg. No. 883/2004 of the European Parliament and the Council of the European on 29.4.2004 on the coordination of social security systems (cf. corrected version of Reg. No. 883/2004, OJ (EU) No. L 1200/1 of 7.6.2004). In the 45 recitals in its Preamble Reg. No. 883/2004 gives an account not only 18 of the amendments vis-à-vis former Reg. No. 1408/71, but also summarises the existing principles and rules of the coordination of social security systems. The aim remains that of merely coordinating social security systems and not harmonising It is expressly underlined that the special characteristics of national social security legislation must be respected (cf. Recital No. 4). Moreover, the starting point for the new Regulation is the fact that the former Reg. not only had to take into account developments at Community level, including judgments of the Court of Justice, but also had to reflect changes in legislation at national level. It had therefore become too complex and was in need of modernisation and simplification (cf. Recital No. 3). It was possible to reduce the number of provisions from 100 to 91. This might 19 appear insufficient to some. However, it must be borne in mind that coordination law has to deal with very different social security arrangements in 28 EU Member States. Too great a reduction of the provisions might possibly have resulted Maximilian Fuchs/Rob Cornelissen

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in a reduction of legal certainty. The actual decrease in the number of provisions that was achieved was primarily due to the introduction of the principle of assimilation of facts and events in a single, general provision in Art. 5. This had previously been dealt with in numerous individual articles. This new general principle led in particular to a significant reduction of the number of provisions in the field of accidents at work and occupational diseases, where in Art. 36 a simple cross-reference is made to the rules concerning sickness benefits. In addition, individual provisions were simplified so that they could be formulated more briefly (cf. for example Art. 10 of the Regulation, concerning the overlapping of benefits, was shortened by three paragraphs compared to the former Art. 12 of Reg. No. 1408/71). 20 According to Art. 91(1), the application of Reg. No. 883/2004 was linked to the entry into force of an Implementing Regulation. The preparation and adoption of this Implementing Regulation took a great deal of time. This was due to a large extent to the fact that the new Member States, which had not been involved in the adoption of Reg. No. 883/2004 and which brought with them additional coordination problems, came up against significant difficulties. Reg. No. 987/2009 of the Parliament and the Council that laid down the procedures for implementing Reg. No. 883/2004 on the coordination of social security systems was adopted on 16.9.2009 (OJ No. L 284 s. 1). Both Regulations have now been in force since 1.5.2010. Geographically the scope of both Regulations encompasses all Member States of the EU (for the specific problems of implementation in the new Member States s. Tagger, Die Erweiterung – Herausforderungen für die Sozialrechtskoordinierung, in: Marhold (ed.), Das neue Sozialrecht der EU, 2005, p. 79 et seq.). 21 Reg. No. 1408/71 was repealed on the date of application of Reg. No. 883/2004 (Art. 90(1) Reg. No. 883/2004)). However, it remains in force for the purposes laid down in Art. 90(1)(a-c) of Reg. No. 1408/71. This concerned, for example, the extension of the provisions of Reg. No. 1408/71 and Reg. No. 574/72 to include third-country nationals. Of particular importance, apart from special questions concerning Greenland, was the continued application to the parties to the EEA Agreement and the Agreement between the EC/Member States and the Swiss Confederation, for as long as those agreements had not been modified in the light of Reg. No. 883/2004. This has taken place in the meantime. Reg. No. 883/2004 and Reg. No. 987/2009 were extended to include third-country nationals by Reg. No. 1231/2010 of the Parliament and the Council of 24.11.2010 (OJ No. L 344 p. 1). As a result of the revision of Annex II concerning the Agreement on the free movement of persons with Switzerland, the Regulations also apply as of 1.4.2012 in relation to Switzerland. On the basis of Decision No. 76/2011 of 1.7.2011 of the EEA Joint Committee on the amendment of Annex VI (Social Security, OJ No. L 262 p. 33) and Protocol 37 to the EEA Agreement (OJ of 15.3.2012 No. L 76 p. 6), the coordination regulations have also been declared binding for the EEA States.

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III. The legal basis of coordination law 1. The law of social security coordination – its concern and purpose

Social security coordination has its basis in primary Union law. The concerns 22 and purpose of social security coordination are set out in Art. 48 TFEU. According to the explicit wording of the Article, the concern is to adopt measures in the field of social security so as to provide freedom of movement for workers. Coordination law is committed to this purpose. It is not only its wording, but also the place given to Art. 48 TFEU in the scheme of the Treaty that indicates the purpose of coordination. Art. 48 TFEU is anchored in the system of provisions of Art. 45 TFEU et seq. Securing the right of freedom of movement for workers, the self-employed and those of equivalent status was the sole original guiding principle of coordination. That is why Art. 45 TFEU or Art. 48 TFEU have been used again and again as teleological instruments of interpretation in the case-law of the CJEU when interpreting the provisions of coordination law. For this reason coordination law has sometimes been referred to as freedom of movementspecific social law (cf. Schuler, Das Internationale Sozialrecht, p. 274 et seq.). Coordination law now, however, also encompasses economically non-active persons. In this way social security coordination law can be described as the sum of all primary and secondary legal provisions, rules and principles that aim to remove national social security barriers, which could prevent an individual from exercising his/her right to freedom of movement (for a similar definition see Pennings, Introduction to European Social Security Law, 4th ed. 2003, p. 6). Characterising coordination social law in this way indicates at the same time 23 its limits. European social law, in as much as it concerns coordination law, leaves the existence of national systems of social security legislation untouched. Coordination aims simply at the “deterritorialisation” of national social security legislation and not at the harmonisation of its contents (cf. CMLR 1993, 515). So there is no intention of creating a uniform body of European social security law. European social security law creates rather a uniform set of rules for the Member States, meaning that Member States lose legislative power to determine, in relations between themselves, the ambit and the conditions for the application of their national legislation so far as the persons who are subject thereto, and the territory within which the provisions of national law take effect, are concerned (see also Eichenhofer, EAS, B 1200 para. 52). Coordination therefore stands in contrast to another form of regulation, har- 24 monisation. A harmonised social security law would be the sum of all international provisions that are aimed at ensuring States adapt their national law to bring it in line with the requirements of harmonising provisions (according to Pennings, Introduction to European Social Security Law, 4th ed. 2003, p. 8). With regard to its origins and development, European social security law has seen itself almost exclusively as a legal framework for coordination (Scheuer, in: Lenz/Borchardt, EU- und EG-Vertrag, 4th ed. 2006, Art. 42 para. 1). In conMaximilian Fuchs/Rob Cornelissen

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trast, on the basis of Art. 157 TFEU, a certain degree of harmonisation in the field of social security has taken place. This article, concerning the principle of equal pay for men and women, has led to the need to adapt national rules in the field of social security. 2. Personal scope

Originally, the personal scope of coordination Regulations (EEC) No. 3 and No. 1408/71 covered only workers, their family members and survivors, as well as stateless persons and refugees. This was extended over time to included selfemployed persons, civil servants and students. The composition of this group indicates that the Regulations were geared almost exclusively towards the working population. 26 Art. 2 abandoned this policy based on economic activity and there are no longer any references made to such. What is decisive is whether the legislation of one or more Member States applies, or has previously applied, to a person. This shows that the original economic motivation of the earlier Regulations has been overcome and a clear commitment to including persons who are not economically active (Jorens/Overmeiren, General Principles, EJSS 2009, 47 (52)). 27 The nationality requirement remains. Even the new Reg. No. 883/2004 did not in principle cover third-country nationals. The CJEU did not regard Art. 48 TFEU as a correct legal basis for this (CJEU, C-95/99 among others (Khalil), EU:C:2001:532). The inclusion of third-country nationals in the previous Reg. No. 1408/71 was made possible due to a Regulation based on Art. 79(2)(b) TFEU (= Art. 63 No. 4 EC) (Reg. No. 859/2003; OJ (EU) No. L 124/1 of 20.5.2003). Reg. No. 1231/2010 continues this regulatory approach, so that third-country nationals are now also included in the scope of the coordinating Regulations. 25

3. Material scope

The material scope, defined in Art. 3 Reg. No. 883/2004, concerns the question of which areas of social security law, or which benefits systems of the individual Member States, are coordinated by the Regulation. In the same way as ILO Convention No. 102 concerning Minimum Standards of Social Security of 28.6.1952, Art. 3(1) Reg. No. 883/2004 uses a system where the branches of social security covered are listed (cf. van Raepenbusch, La sécurité sociale, p. 249 for parallels in the rules). Only those benefits falling within the areas listed are covered by the coordination rules of the Regulation. The list is therefore of an exhaustive nature (cf. in this respect CJEU, Case 249/83 (Hoeckx), EU:C: 1985:139). 29 Art. 3 (2) Reg. No. 883/2004 extends the material scope so that it applies also to general and special social security schemes, whether contributory or non-contributory, and to schemes relating to the obligations of an employer or ship-owner who, pursuant to para. 1, are obliged to provide benefits. The insertion of 28

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para. 2 a by Reg. No. 1247/92 of 30.4.1992 (OJ (EC) No. L 136/1) constituted a significant innovation. Special non-contributory cash benefits now also fall within the material scope of the Regulation (Art. 3(3) Reg. No. 883/2004). These are defined in more detail in a special provision in Art. 70 Reg. No. 883/2004). As was the case under the earlier regulations, social and medical assistance 30 are excluded from the scope of the Regulation (Art. 3 (5)(a) Reg. No. 883/2004). The same applies to compensation schemes that provide for liability on the part of a Member State for payment of damages to persons (Art. 3 (5)(b) Reg. No. 883/2004). 4. Territorial scope

In contrast to Reg. (EEC) No. 3, which listed the geographical areas to which 31 the Regulation applied in its Annex A, Reg. No. 883/2004 includes no express definition of its territorial scope. The question concerning the territorial scope of the Regulation arises time and again when events that have occurred outside of the territory of the EU Member States need to be assessed (the question concerning which territories belong to a specific Member State is based on the law of the respective Member State). Of course Reg. No. 883/2004 applies in the territories to which the TFEU applies by virtue of Art. 349/355 TFEU. On the basis of specific agreements (see para 39 above), the Regulations also apply in Switzerland and the EEA States. In the area of social security coordination, additional considerations must be 32 taken into account when determining the territorial scope. First, it is necessary to recall earlier cases dealing with the question of territorial scope .These include cases that concerned events which took place on the territories of former colonies (cf. CJEU, Case 87/76 (Bozzone), EU:C:1977:60 and the case-law of the CJEU concerning rights to pensions arising from activities in Algeria, cf. here van Raepenbusch, La sécurité sociale, p. 302 et seq.). Similar issues arise in legal disputes where the persons concerned wish to invoke the Regulation, but the events in issue occurred in the course of an activity that took place outside of the territory of the Union (cf Pennings, European Social Security Law, 5th ed. 2010, p. 27 et seq. for this topic). In its seminal judgment in van Roosmalen (CJEU, Case 300/84 (van Roos- 33 malen), EU:C:1986:402) the CJEU underlined that whether a matter is within the territorial scope, and therefore also whether the Regulation applies, does not depend on the place of activity, but on the link between the person concerned and the Member State under whose social security scheme the relevant insurance periods were completed (This principle was again confirmed in CJEU, Case 105/89 (Buhari-Haji), EU:C:1990:402. See also CJEU, Case 60/93 (Aldewereld), EU:C:1994:271). In this way the territorial scope of the Regulation apparently extends outside of the territory of the Member States. In reality this is not an extension of scope, but rather concerns the functional determination of affiliation to a specific social security scheme of the Member State. This Maximilian Fuchs/Rob Cornelissen

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functional link is not as such dependent on the territory in which the individual is located, but on other characteristics that indicate membership of a specific social security system (in this respect the case-law of the CJEU concerning the territorial scope of Reg. No. 883/2004 is consistent with its judgments concerning Art. 45 TFEU, which involved a similar problem, namely the applicability of the free movement of worker provisions where a worker is employed outside of the territory of the Union (cf. here Fuchs/Marhold, Europäisches Arbeitsrecht, 4th ed. 2014, p. 73 et seq.). Social security coordination law is also applicable to a continental shelf adjacent to a Member State, if the Member State takes advantage of the economic rights to prospect and/or exploit natural resources on that part of the continental shelf (CJEU, C-347/10 (Salemink), EU:C:2012:17). With regard to activities pursued on board vessels, see Art. 11 (4) Reg. No. 883/2004 and CJEU, C-106/11 (Bakker) EU:C:2012:328. 5. Temporal scope

The temporal scope concerns the question which legislation is applicable to events relevant for social security purposes as regards the effluxion of time. The fact that many events are not completed in the short-term, but are by their very nature long-term events (e.g. accrued pension rights) constitutes a particular problem for social security legislation. 35 The CJEU has laid down the principle that – insofar as retroactive application is not explicitly provided for in the individual case – a legal provision will be directly applicable when it comes into force, and indeed not only for events and occurrences that take place in the future, but also for those that took place in the past and still have effects for the future (see with regard to the case-law developed by the CJEU concerning this principle van Raepenbusch, La sécurité sociale des personnes qui circulent à l’intérieur de la Communauté Economique Européenne, 1991, p. 310 et seq. which includes numerous examples of such case-law). 36 This principle is also the basis of the transitional provisions in Art. 87 Reg. No. 883/2004. Para 1 of this provision expresses the contradiction that no rights shall be acquired pursuant to the Regulation for the period before its date of application. However, Art. 87(2) and (3) of Reg. 883/2004 do indeed require periods of insurance, employment or residence completed and events arising prior to the date of application of the Regulation to be taken into consideration. The relationship of Reg. No. 883/2004 to Reg. No. 1408/71 is determined in Arts. 87(8) and (9) (cf. Horn, SGb 2012, 70-73 for the transitional provisions). 34

6. Role and basic principles of social security coordination law 37

Title III of Reg. No. 883/2004 contains special provisions for coordinating the various categories of benefits listed in Art. 3(1). Title I includes the basic principles of coordination that apply to all categories of benefits, provided these are not subject to any special rules. The role of the coordination instrument can be 14

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summarised by reference to four questions (van Raepenbusch, La sécurité sociale, p. 149; Pennings, European Social Security Law, 5th ed. 2010, p. 7): – Which national social security legislation applies to the person concerned? This is a question of the applicable legislation. At issue here is the role of the EU social security coordination rules as conflict of law rules. – How are nationals of another Member State treated under the social security legislation of another Member State? May they be treated differently from nationals or must they be treated equally? – Can an entitlement given under the social security legislation of a specific Member State also be claimed in another Member State where a person resides or stays, or is the entitlement / benefit territorially limited (the problem of the so-called export of benefits)? – Should periods of insurance or entitlements that have been completed or acquired under the social security legislation of a specific Member State also be relevant for the determination or calculation of benefits under the social security legislation of another Member State (the problem of aggregation of periods)? a) Determination of a single applicable legislation

A person who never leaves his/her Member State will always be subject to the social security legislation of his/her own country. This changes if a person has worked or resided in another Member State or even in several other Member States. In this case it may be necessary to have conflict of law rules, which make it possible to determine which Member State’s social security legislation is applicable to the particular social security situation (cf. von Maydell, Sach- und Kollisionsnormen, p. 55 et seq. for the function and structure of conflict of law rules in international social security law). Art. 11 (1)(sentence 1) Reg. No. 883/2004 expresses a key principle. Persons to whom the Reg. applies are subject to the legislation of a single Member State only. The aim of this principle is to prevent anyone from being left without social protection or, similarly, to prevent double entitlement to similar benefits and the burden of double contributions (cf. Preliminary remarks on Art. 11). The principle of a single applicable social security legislation is supplemented by the prohibition of overlapping benefits laid down in Art. 10 Reg. No. 883/2004. In the determination of the applicable social security legislation, the authors of the Regulation gave priority to the principle of the place of employment (lex loci laboris). For employed and self-employed persons, this can be found in Art. 11(3)(a). In Art. 12 Reg. No. 883/2004 there are significant exceptions to the principle that the place of employment is the applicable legislation. In the case of posting of employees to another Member State, the principle in Article 12(1) Reg. No. 883/2004 applies, namely that an employed person, who normally pursues an Maximilian Fuchs/Rob Cornelissen

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38

39

40

41

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activity in his/her Member State but is posted to another Member State, shall remain subject to the social security legislation of that State, provided the anticipated duration of such work does not exceed 24 months and that he/she is not sent to replace another person. In cases where the 24-month period is unexpectedly exceeded, it is possible to extend the period with the appropriate authorisation in order to maintain affiliation to the original social security legislation. Art. 13 Reg. No. 883/2004 contains different provisions (significantly amended by Reg. (EU) No. 465/2012) for the simultaneous pursuit of employed and selfemployed activity in two or more Member States. b) The prohibition of discrimination against other EU nationals

Art. 18 TFEU prohibits any form of discrimination based on nationality (for the key importance of the prohibition of discrimination for European integration see Bell, The Principle of Equal Treatment. From Market Unifier to Fundamental Right?, in: Craig/De Búrca, The Evolution of EU Law, 2nd ed. 2011, p. 611 et seq.). The general prohibition of discrimination laid down in Art. 18 TFEU is given concrete expression in the area of freedom of movement of workers in Art. 45(2) TFEU. This provision requires the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. 44 In the field of social security coordination law this prohibition of discrimination is set out in Art. 4 Reg. No. 883/2004. Persons to whom this Regulation applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof. The prohibition of discrimination based on nationality laid down in Art. 4 Reg. No. 883/2004 is intended to prevent the host state from according any preferential treatment as regards entitlement to benefits to its own nationals vis-à-vis nationals of other Member States (Eichenhofer, in: Oetker/Preis, EAS B 1200 para. 108). Art. 4 Reg. No. 883/2004 prohibits not only direct discrimination, i.e. provisions that link different legal consequences to nationality, but also so-called indirect discrimination (for an explanation of this term, see the EU’s anti-discrimination directives, e.g. Art. 2 Directive 2000/43/EC) (cf. CJEU, Case 41/84 (Pinna), EU:C:1986:1). 45 It must be noted, however, that disadvantages arising from divergences existing between the social security systems of the various Member States do not have to be removed by the application of the prohibition of discrimination (cf. for example CJEU, Case 1/78 (Kenny), EU:C:1978:140). The problem of socalled reverse discrimination (Inländerungleichbehandlung, discrimination à rebours) which is generally well-known in Union law (cf. here Streinz, Europarecht, 9th ed. 2012, § 12 para. 819 et seq.) also exists in European social security law (see in this respect van Raepenbusch, La sécurité sociale, p. 157 et seq.). The question in relation to this is whether or not a Member State may treat its own nationals worse than it does other EU nationals, to whom it must grant cer43

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tain concessions in view of the principle of equal treatment. In accordance with established case-law of the CJEU, such reverse discrimination is permitted if the person concerned has not made use of the right of freedom of movement (cf. for example the judgment of the CJEU in the Case 153/91 Petit, EU:C:1992:354: the Belgian plaintiff wished to speak French in a Belgian court, even though the applicable rules provided for the use of Flemish. In this case there was no violation of the principle of equal treatment as the case contained no cross-border element). c) Principle of aggregation of insurance periods

The principle of aggregation of insurance periods is one of the oldest achieve- 46 ments of international social security law. This principle is intended to overcome disadvantages for individuals who, during the course of their lives, have been affiliated to more than one social security system and who are faced with the fact that each national system requires affiliation to one branch of social security for a specific period of time as the basis for the acquisition of a right to benefits. Where a national social security system accepts only insurance periods completed within that system, this causes a disadvantage to all individuals who have completed periods in different countries. The aim of the principle of aggregation is therefore to put the person concerned in such a position as if he/she had acquired his/her entire social security record in the social security system from which he/she claims benefits. This principle in now contained in Art. 6 Reg. 883/2004. This principle was already included in ILO Convention No. 48 of 1935. 47 Art. 48(a) TFEU explicitly requires that EU social security coordination law should include aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of several countries. From the very outset this principle was implemented in secondary law (albeit scattered in numerous provisions of Reg. No. 1408/71) and is now embodied in Art. 6 of Regulation No. 883/2004. This Article requires that periods of insurance and employment, self-employment or residence shall be taken into account by the competent institution of a Member State for the purposes of the acquisition, retention, duration or recovery of the right to benefits as though they were periods completed under the scope of the legislation which it applies. The opposite of the principle of aggregation is the principle of pro rata calcu- 48 lation. According to this principle, each competent institution is obliged only to pay a proportion of the benefit in relation to the relevant periods completed under its national social security legislation (see as an example, Art. 52 Reg. No. 883/2004.

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d) Equal treatment of facts and events (principle of assimilation) 49

The principle of equal treatment of facts and events or the principle of assimilation (see in this respect Eichenhofer, Sozialrecht der Europäischen Union, 4th ed. 2010, para. 115) requires that facts and events that exist or occur in another Member State must also be taken into account by another Member State. Even without explicit codification in Reg. No. 1408/71, the CJEU had already ruled on the legal necessity of this principle (cf. for example CJEU, Case 20/85 (Roviello), EU:C:1988:283; C-349/87 (Paraschi), EU:C:1991:372; C-28/00 (Kauer), EU:C:2002:82). This principle has now been expressly incorporated into Art. 5 Reg. No. 883/2004. e) Principle of the export of benefits

The principle of the export of benefits is embodied in primary law in Art. 48 (b) TFEU. It has been implemented in secondary law in Art. 7 Reg. No. 883/2004. It provides that cash benefits shall not be subject to any reduction, amendment, suspension, withdrawal or confiscation on account of the fact that the beneficiary or the members of his/her family reside in a Member State other than that in which the institution responsible for providing benefits is situated. 51 The principle of the export of benefits is restricted in the case of unemployment benefits in cash in accordance with Art. 63 et seq. Reg. No. 883/2004 (the CJEU regarded this restriction as compatible with Union law, cf. CJEU Case 62/91 (Gray), EU:C:1992:177). Furthermore, pursuant to Art. 70 (4) Reg. No. 883/2004, the principle of the export of benefits does not apply to special noncontributory cash benefits. These are in fact only granted in the Member State of residence in accordance with the legislation it applies. 50

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Part 1: Articles 45 and 48 TFEU – Workers Consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union – Protocols – Annexes – Declarations annexed to the Final Act of the Intergovernmental Conference which adopted the Treaty of Lisbon, signed on 13 December 2007.

Overview The freedom of movement of workers is regulated in Title IV Chapter 1 of the 1 Treaty on the Functioning of the European Union (TFEU). Together with the freedom of establishment and freedom to provide services, the freedom of movement of capital and freedom of movement of goods, this constitutes the socalled fundamental freedoms of the internal market that were enshrined in European primary law from the very outset. The intention is to ensure goods, capital, services, employed and self-employed persons enjoy unrestricted circulation within the internal market as far as possible. Self-employed persons have the choice of either exercising their right to freedom of movement in another Member State or establishing themselves there permanently. Employed persons can take up employment in another Member State or can be posted abroad by their employer. Seen in connection with the other internal market freedoms it is evident that the free movement of persons was conceived primarily as an economic freedom. The freedom of movement of workers, for example, was initially regarded simply as a desirable side-effect of the liberalisation of the exchange of goods. Employers should have the option of recruiting workers from abroad. At best, pursuit of an activity as an employed person in another Member State should involve an improvement in the living and working conditions of the person concerned. However, it may be assumed in the meantime that the right to freedom of movement is now indeed protected as a human right as an end in itself. Certainly Art. 18 of the European Social Charter of the European Council from 18.10.1961 postulates the right to engage in a gainful occupation in the territory of other Parties as a fundamental social right. Pursuit of the objectives of the European Social Charter is the basis of European social policy (Art. 151 TFEU). In addition Art. 45 of the Charter of the Fundamental Rights of the European Union includes an autonomous fundamental European right to freedom of movement. Furthermore, the right to freedom of movement is also mentioned in the Preamble of the Treaty on European Unity. In other words, the free-

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dom of movement of persons is today to be understood and interpreted as a general fundamental right of Community law. 2 The right to freedom of movement is, however, not only granted to employed and self-employed persons but, since the Maastricht Treaty, may be exercised by every citizen of the Union. Art. 21 TFEU does however also include a possible restriction on the freedom of movement of citizens of the Union. This restriction can also be found in secondary law in the Directive on the right to move and reside freely within the territory of the Member States (Directive 2004/38/EC), which requires that persons who are neither employed persons nor self-employed persons must have sufficient resources for themselves and their family members and must have comprehensive sickness insurance cover in the host Member State. Whether this restriction can actually be applied and to what extent is subject to the interpretation of the CJEU. At any rate in the Case Martinez Sala the Court granted a European citizen the right to equal treatment with the nationals of the Member State concerned in which she was staying (CJEU, Case C-85/96, EU:C:1998:217). Students, too, whose right to residence has been acknowledged, but who during their course of studies have recourse to social assistance, may not be discriminated against in comparison to nationals in that they are barred from the right to minimum subsistence allowance (CJEU, Case C-184/99 (Grzelczyk), EU:C:2001:458). However, it is permissible to make the provision of a student grant subject to a specific prior period of residence (CJEU, Case C-158/07 (Förster), EU:C:2008:630; Case C-209/03 (Bidar), EU:C:2005:169). 3 Apart from the special provisions of Art. 45-48 TFEU, the general principle of equality laid down in Art. 18 TFEU, which can gain independent meaning, also applies where the rights of citizens of the Union are concerned who, for example, are not employed persons. It is then always applied independently if there is no more specific prohibition of discrimination (CJEU, Case C-131/96 (Mora Romero), EU:C:1997:317). Nevertheless, the applicability of Art. 45 TFEU does not exclude the parallel application of the general principle of equality pursuant to Art. 18 TFEU. In fact the Court often cites the general principle of equality in connection with the Articles pertaining to freedom of movement (CJEU, Case 1/78 (Kenny), EU:C:1978:40). Art. 45 TFEU is therefore a special case of application for the principle of equality (CJEU, Case C-20/96 (Snares), EU:C:1997:227), which can flank Art. 18 as reinforcement. Furthermore, Art. 45 gains particular importance where questions of covert discrimination are concerned. In fact the task of Art. 45 TFEU is more far-reaching than that of Art. 18 TFEU, as it is not only intended to prevent discrimination, but also even the mere disadvantages of freedom of movement. 4 Where coordinating social law is concerned Art. 45 TFEU is of autonomous importance beside Art. 48 TFEU, which is the legal basis of Reg. No. 883/2004. On the one hand the CJEU has regularly judged the provisions of secondary law in the light of the right to freedom of movement. In this respect Art. 45 TFEU is

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often the basis for interpreting the provisions of the coordination Regulation (CJEU, Case 232/82 (Baccini), EU:C:1983:70). In addition the Member States should also be obliged to apply their national social legislation in the light of the aims of Art. 45 TFEU in as far as there are no clear provisions in the Regulation nor in national legislation for preventing disadvantages (CJEU, Case C-165/91 (van Munster), EU:C:994:4661). Furthermore, the Court rejected provisions of regulatory legislation insofar as they infringed on the principle of freedom of movement (CJEU, Case C-227/89 (Rönfeldt), EU:C:1991:52; CJEU, Case 41/84 (Pinna), EU:C:1986:1; CJEU, Cases C-396/05, C-419/05, C-450/05 (Habelt/ Möser/Wachter), EU:C:2007:810. “If not of such a nature as to guarantee the equal treatment required by Art. 48 of the Treaty (now Art. 45 TFEU), a provision has no place in the coordination of national laws provided for in Art. 51 of the Treaty (now Art. 48 TFEU) in order to promote freedom of movement for workers in the Community” (CJEU, Case 20/85 (Roviello), EU:C:1988:283). Finally the Court increasingly derives direct rights from Art. 45 TFEU, which may not be provided for under secondary law. It can therefore be said that provisions of secondary law are frequently still only relevant in as far as they are more farreaching than primary law or in that they regulate details (CJEU, Case C-20/96 (Snares), EU:C:1997:518).

Article 45 TFEU (1) Freedom of movement of workers shall be secured in the Union. (2) Such freedom of movement of workers shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. (3) It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health, a) to accept offers of employment actually made; b) to move freely within the territory of Member States for this purpose; c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission. (4) The provisions of this Article shall not apply to employment in the public service. I. Ratio legis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Personal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) The term worker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Nationality of the worker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Family members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Right of exit, entry and residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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3. 4. 5. 6. 7. 8.

b) Access to employment – offers of employment . . . . . . . . . . . . . . . . . . . . c) Employment and working conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) Employment conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . bb) Tax advantages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cc) Social advantages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Right to remain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Territorial scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prohibition of discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Third-party effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Indirect discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prohibition of disadvantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Justification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ordre public proviso. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exception for public services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16 17 18 19 21 25 26 30 31 32 35 37 38 39

I. Ratio legis 1

While the objective of the Treaty of the European Economic Community mentioned in Art. 48 EEC (now Art. 45 TFEU) is to complete the right of freedom of movement for persons, the actual Treaty assumes that this right is guaranteed. Both the old and the current version do not only ban discrimination, but ask that even the mere disadvantages of the right to freedom of movement be prohibited. II. Commentary 1. Personal scope a) The term worker

The personal scope of Art. 45 TFEU encompasses workers within the meaning of Community law (CJEU, Case 75/63 (Unger), EU:C:1964:19). This term is given a broad interpretation by the CJEU (or rather restrictions are strictly interpreted). Decisive is that the work is genuine and effective, but it is not permissible to define a minimum scope (CJEU, Case 157/84 (Fracogna), EU:C: 1985:243), so that even part-time employment that does not guarantee a subsistence level suffices here (CJEU, Case 53/81 (Levin), EU:C:1982:81 and Case 139/85 (Kempf), EU:C:1986, 223; CJEU, Case C-46/12 (L.N.), EU:C:2013:97). Even if the employment pursued is not an economic activity, it can nevertheless be sufficient provided it is a genuine and effective activity (CJEU, Case C-413/01 (Ninni-Orasche), EU:C:2003:600). However, it is permissible to refuse a frontier worker in minor employment family benefits in the country of employment (CJEU, Case C-213/05 (Geven), EU:C:2007:438). 3 In this respect the term worker in Art. 45 TFEU differs significantly from that in Reg. No. 883/2004, which is defined specifically in the light of social law and based on the status of insured person. Although the latter is to be interpreted in accordance with Community law, it refers to national social legislation (CJEU, Case 182/78 (Pierik II), EU:C:1979:142). Accordingly persons not pursuing a 2

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professional trade or activity are classed as insured persons provided they are insured under a social security scheme. Therefore a person who is classed as a worker within the meaning of Art. 45, but who is in fact not insured pursuant to Reg. No. 883/2004, e.g. an employed person not legally insured against sickness due to his/her income, cannot invoke the Chapter “Sickness benefits” in Reg. No. 883/2004 but only Art. 45 TFEU and the corresponding enacted regulations and directives. Civil servants of a Member State (CJEU, Case 66/85 (Lawrie-Blum), EU:C: 4 1986:284) and civil servants of European institutions (CJEU, Case 152/82 (Forcheri), EU:C:1983:205; Case C-137/04 (Rockler), EU:C:2006:106; Case C-233/12 (Gardella), EU:C:2013:449) are also workers within the meaning of Art. 45 TFEU and can in principle invoke their right to freedom of movement. This applies independently of whether the restriction with regard to freedom of movement was applicable on entering the public service or not. b) Nationality of the worker

The worker must be an EU national or a national of an equivalent EEA state. 5 In as far as workers from Accession Countries do not yet have freedom of movement status because a Member State has applied transitional rules, but the workers nevertheless receive access to the labour market of this Member State for other reasons, they are placed on equal terms with workers with the right to freedom of movement and are entitled to equal treatment in the case of social advantages. It is not necessary for a person to have foreign nationality in order to be enti- 6 tled to make claims based on the principle of freedom of movement. On the contrary a person can invoke Art. 45 TFEU vis-à-vis his/her own home State, because it suffices that the person concerned returns after exercising his/her right to freedom of movement (CJEU, Case 298/84 (Iorio), EU:C:1986:33 und Case C-370/90 (Singh), EU:C:1992:296) or although as a frontier worker he/she works in the home State but resides in a different Member State (CJEU, Case C-212/05 (Hartmann), EU:C:2007:437). Only purely internal situations are excluded from this provision. A worker being a national of the Member State concerned, but not exercising his/her right to freedom of movement constitutes such an internal situation (CJEU, Case 175/78 (Saunders), EU:C:1979:88; CJEU, Case 180/83 (Moser), EU:C:1984:233; CJEU, Case C-212/06 (Government of Communauté française e.a.), EU:C:2008:178). This case law has gained importance in particular for the right of family re- 7 unification. In the joint Cases Uecker and Jacquet (CJEU, Cases C-64/96 and C-65/96, EU:C:1997:285) the CJEU confirmed its former case law, whereby even under application of Art. 21 TFEU nationals of a Member State are not entitled to move their family members with third-country nationality to join them under the same conditions as other EU nationals. Neither does a person returning to his/her home State have the right to bring his/her family members with Rose Langer

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him/her, even if they had a right of residence as members of the family in another EU state (CJEU, Case C-291/05 (Eind), EU:C:2007:771). Unlike under the scope of Reg. No. 883/2004, application of Art. 45 TFEU is subject to a person having had contact for professional reasons with another Member State (CJEU, Case C-112/91 (Werner), EU:C:1993:27). So former workers can under certain circumstances lose their right to needs-dependent social advantages (CJEU, Cases C-22/08 and C-23/08 (Vatsouras and Koupatantze), EU:C:2009:344). Nevertheless, the child of a migrant worker born in the country of immigration falls under the protection of Reg. No. 492/2011. On principle third-country nationals, refugees and stateless persons do not enjoy the right to freedom of movement. Therefore spouses who are nationals of a third country only have access to the labour market in the State in which the other spouse works due to exercising his/her right to freedom of movement, but not in another Member State (CJEU, Case C-10/05 (Mattern/Hajrudin), EU:C: 2006:220). Here, too, there is a difference to Reg. No. 883/2004, which like its predecessor also applies to refugees and stateless people. Moreover, Reg. No. 883/2004 has been expanded by Reg. No. 1231/10 to include nationals of nonEU countries who have their legal residence in the EU and who are in a crossborder situation. However, the Agreement on the European Economic Area (EEA) lays down equal treatment for nationals of Iceland, Liechtenstein and Norway (OJ L 1 from 03.01.1994, p. 3). In addition Swiss nationals have also had the right to exercise the full scope of freedom of movement since the coming into force of the Agreement on Freedom of Movement between the EU and Switzerland on 1. June 2002 (Decision of the Council and – with regard to the Agreement on Scientific and Technical Cooperation – of the Commission from 4 April 2002 concerning the conclusion of seven agreements with the Swiss Confederation (OJ L 114, p. 1 et seq.); amended by decisions of the EU-Swiss Joint Committee No. 2/2003 from 15 July 2003 (OJ L 187, p. 55 et seq.) and No. 1/2006 from 6 July 2006 (OJ L 270, p. 67 et seq.). In addition Turkish nationals also enjoy a special status in that although they cannot invoke the European Treaties, they can invoke the Association Agreement between the EC and Turkey from 12.9.1963 (OJ No. 217, s. 3687), where according to Art. 12 the partners to the agreement are to be guided by the principle of freedom of movement and to gradually develop such principle. Turkish workers have therefore gained a status comparable to that of Community nationals, because the decisions of the Association Council are to be applied with immediate effect (CJEU, Case C-340/97 (Nazli), EU:C:2000:777; CJEU, Case C-329/97 (Ergat), EU:C:2000:133; CJEU, Case C-171/01 (Wählergruppe), EU:C:2003:260).

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c) Family members

The freedom of movement of the worker also encompasses specific rights 12 with regard to his/her family members. In as far as these are not entitled to freedom of movement in their own right, they can have derivative rights to residence, employment, stay and education that are described in more detail in Directive 2004/38/EC. Initially the right of the worker includes the right to family reunification with regard to family members who are nationals of an EU/EEA State or of a third country. However, as already mentioned, this right applies only to workers who are nationals of an EU State and who work in a Member State other than their home country (Art. 3 Directive 2004/38/EG; CJEU, Cases 35/82 and 36/82 (Morson), EU:C:1982:368). In as far as family members are to be taken into account, these have their own 13 right to equal treatment (Art. 24 (1) Directive 2004/38/EC; cf. CJEU, Case C-3/90 (Bernini), EU:C:1992:89). However, the family members of a frontier worker can claim child-raising allowance from the State of employment regardless of residence in another Member State (CJEU, Case C-212/05 (Hartmann), EU:C:2007:437). 2. Material scope a) Right of exit, entry and residence

Freedom of movement entails the right to leave the State of origin (Art. 13 (2) 14 Universal Declaration of Human Rights; Art. 18 (4) European Social Charter; Art. 4 Directive 2004/38/EC) and to move to another Member State in order to take up residency there. A valid personal identity card or passport is sufficient for entry. No other formalities are permissible (Art. 5 Directive 2004/38/EC; cf. CJEU, Case 157/79 (Pieck), EU:C:1980:179). Anyone proving worker status or who is a family member of a worker is entitled to stay for longer than three months regardless of whether they have sufficient resources and sickness insurance cover or not (Art. 7 Directive 2004/38/EC). The status of worker is not lost in the case of sickness, accident, involuntary unemployment or vocational training (Art. 7 (3) Directive 2004/38/EC). Neither do family members lose their rights due to death or divorce. Former workers and their family members have more favourable conditions for gaining the right to permanent residence (Art. 17 Directive 2004/38/EC) compared with other Union citizens. Nationals from accession countries do not enjoy freedom of movement while 15 transition rules are agreed and remain in force in the Accession Treaty. If, however, they have been granted entry in the labour market of a Member State, they must not be put at a disadvantage – apart for the formalities of work permit legislation.

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b) Access to employment – offers of employment 16

Art. 45 (3)(a) TFEU guarantees the right to accept offers of employment, which is specified in more detail in Art. 1-6 Reg. No. 492/2011. This right is of particular importance, because EU nationals have priority over nationals of a third country. Exceptions are made where sport is concerned provided this concerns international matches (CJEU, Case 13/76 (Donà), EU:C:1976:115), but not, however, for professional sport (CJEU, Case C-415/93 (Bosman), EU:C: 1995:463). Problematic is the question of to what extent knowledge of a language can be required. It is also conceivable that different professional qualification requirements might constitute de facto discriminations. For this reason the endeavours to achieve recognition of diplomas to promote access to employment are of particular importance (Directive 2005/36/EC of the European Parliament and of the Council from 7 September 2005 on the recognition of professional qualifications (OJ L 255 from 30.9.2005, s. 22); Reg. No. 279/2009 of the Commission from 6 April 2009 amending Annex II of Directive 2005/36/EC of the European Parliament and of the Council from 7 September 2005 on the recognition of professional qualifications). Finally the right to accept offers of employment includes the possibility of residence in order to seek work (Art. 6 Directive 2004/38/EC; cf. CJEU, Case C-292/89 (Antonissen), EU:C:1991:80). c) Employment and working conditions

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The right to take up employment is laid down in Art. 45 (3)(c) TFEU. There must be no discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment (Art. 45 (2) TFEU). The right to equal treatment entailed in such employment means in particular that no work permit can be required. This principle is specified in more detail in Art. 7 Directive 2004/38/EC. The right is also directed towards equal treatment with regard to employment and working conditions as well as social and tax advantages (Art. 45 (2) 45, Art. 7 (1) and para. 2 Reg. No. 492/2011). However, to date this right is granted only to already employed workers and not to job-seekers (CJEU, Case C-138/02 (Collins), EU:C: 2004:172). Whether or not this case law prevails will depend on the ruling of the CJEU in the Case (C-67/14) Alicmanovic (OJ C from 12.05.2014, C 142, 14). aa) Employment conditions

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All rights directly linked to the employment relationship are concerned in this connection, such as remuneration, protection against dismissals or promotion including voluntary benefits paid by the employer (CJEU, Case 152/73 (Sotgiu), EU:C:1974:13). The prohibition of indirect discrimination is of particular importance within the scope of this right. That is why employment periods completed in another Member State must be taken into account when classifying persons in specific career path groups (CJEU, Case C-15/96 (Schöning-Kougebetepoulou),

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EU:C:1998:3). Neither can the granting of a length-of-service increment be linked to employment periods completed solely in the home State if this results in a partitioning of the labour market (CJEU, Case C-224/01 (Köbler), EU:C: 2003:513). bb) Tax advantages

Case law has had a far-reaching impact especially where the field of fiscal 19 law is concerned. An extensive equal treatment of foreign facts and events is taking place here in order to prevent any covert discrimination. This is carried out in such a way that family members residing in another Member State must nevertheless be taken into account where tax reductions are concerned (CJEU, Case C-279/93 (Schumacker), EU:C:1995:31). Although the Court does pay attention to the coherence of the tax systems (CJEU, Case C-204/90 (Bachmann), EU:C:1992:35 and Case C-80/94 (Wielockx), EU:C:1995:271). It is therefore permissible to make the taking into consideration of a family member living in another Member State for the splitting procedure dependent on 90 percent of the total income of the spouses being subject to income tax in accordance with the income tax legislation of the respective State. So the splitting advantage cannot be claimed if the spouses are employed in two different States and if one of them earns more than 10 percent of their joint total income (CJEU, Case C-391/97 (Gschwind), EU:C:1999:409). Neither can the subsidy for owner-occupied dwellings (CJEU, Case C-152/05 (Commission/Germany), EU:C:2008:17) nor the fiscal promotion of the private pension be denied to frontier workers who are not subject to taxation in Germany (CJEU, Case C-269/07 (Commission/ Germany), EU:C:2009:527). This case law can be relevant for social security benefits wherever fiscal law 20 influences social law. This is frequently the case where the equalisation of family burdens is concerned. There are also numerous unanswered questions concerning the taxation of old-age pensions. Problem cases include: the taxing of contributions to the old-age pension scheme in the country of employment and further taxation of the pension itself in the country of residence when the pension is paid, or the calculation of German social benefits on the basis of the net wage although it is conceivable that net payments made to replace earnings are subject to taxation in another Member State (CJEU, Case C-400/02 (Merida), EU:C:2004:537). The separation of fiscal law and social law is effected not according to national definition, but according to factual connection. The contributions for financing social security, for example, can be classified as contributions to social insurance and fall within the scope of Reg. No. 883/2004 (CJEU, Case C-169/98 (Commission/France), EU:C:2000:85). The State is free to decide on the applicable tax base for such contributions that are in the nature of a social security contribution. It can, therefore, include income in other States for the assessment (CJEU, Case C-249/04 (Allard), EU:C:2005:329). However, it can also – in the absence of appropriate harmonisation – by application of a convention Rose Langer

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for the avoidance of double taxation exclude income earned in another Member State, provided the person concerned is not disadvantaged (CJEU, Case C-103/06 (Derouin), EU:C:2008:185). cc) Social advantages

Overlapping of rights derived from Reg. No. 492/2011 and Reg. No. 883/2004 occurs again and again in this area. For this reason the relationship of the two Regulations and the rights they give rise to has been the subject of many discussions. In the view of case law certain benefits, e.g. child allowance, can fall within the scope of both Reg. No. 883/2004 and Reg. No. 492/2011 (CJEU, Case C-85/96 (Martinez Sala), EU:C:1998:217). However, as Art. 20 Reg. No. 883/2004 includes an exhaustive catalogue, benefits that do not fall under this Regulation can nevertheless be encompassed by Reg. No. 492/2011. The CJEU ruled in this manner with regard to pre-retirement benefits that were not included in the coordination Regulation at that time (CJEU, Case C-57/96 (Meints), EU:C:1997:564). 22 Overall the circle of social advantages is interpreted very broadly. At all events it is not necessary that the granting of a benefit be directly linked with the employment relationship. The classic definition of a social advantage therefore applies to “all those which – whether or not linked to a contract of employment, are generally granted to national workers primarily because of their objective status as workers or by virtue of the mere fact of their residence on the national territory and the extension of which to workers who are nationals of other Member States therefore seems suitable to facilitate their mobility within the Community” (CJEU, since Case 207/78 (Even), EU:C:1979:144). This means that the frontier worker can also be entitled to a benefit that is granted to all nationals in the country of employment. 23 Social advantages include benefits for the disabled, namely for the worker himself/herself (CJEU, Case 76/72 (Fonds National), EU:C:1973:46) as well as for the members of his/her family (CJEU, Case C-243/91 (Taghavi), EU:C: 1992:306). Family members can claim student grants as a social advantage (CJEU, Case C-308/89 (di Leo), EU:C:1990:400; Case C-542/09 (Commission/ Netherlands), EU:C:32012:346). Moreover, a former worker can also claim student grants for himself/herself, if the course of studies taken is connected to his/her previous employment (CJEU, Case 197/86 (Brown), EU:C:1988:323) or if retraining is necessary due to unemployment (CJEU, Case 39/86 (Lair), EU:C: 1988:322). Other examples of social benefits include housing assistance, social assistance or reductions for public transport (CJEU, Case 32/75 (Cristini), EU:C: 1975:120). 24 In the opinion of the CJEU continued payment of contributions to supplementary old-age insurance for those in public service during performance of military service does not constitute a social advantage (CJEU, Case C-315/94 (de Vos), EU:C:1996:104). This judgement does not really fit into the system of interpret21

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ing the term social advantage in a broad sense and can only be understood in such a way that the Court had reservations at that time with applying equal treatment to foreign military service. d) Right to remain

Although all European citizens have in the meantime the right to take up resi- 25 dency in another Member State, Art. 45 (3)(d) TFEU nevertheless includes an express right to remain in a Member State after termination of employment. The conditions for this are to be embodied in regulations to be drawn up by the Commission. For this reason Art. 17 Directive 2007/38/EC provides for easier conditions for former workers and their family members in gaining the right to permanent residence. 3. Territorial scope

The territorial scope of EC law is defined in Art. 52 TEU and Art. 355 TFEU. 26 Community law applies, for example, in the French overseas departments, but not in the overseas territories of France or in the former colonies of the Member States. Problems arise time and again, because smaller states within Europe, such as San Marino, Andorra or Monaco, do not belong to the EU and where at best freedom of movement and its associated rights are agreed in bilateral agreements with neighbouring states. As these bilateral agreements generally only protect the state’s own nationals, other EU nationals are initially often without protection. A solution to these problems can only be found if the Member States that have concluded bilateral agreements were forced to extend the personal scope on the basis of the obligation of equal treatment. However, the third country cannot be obliged to apply equal treatment. With regard to bilateral agreements between Member States Art. 8 Reg. No. 883/2004 clearly states that an equal treatment obligation generally exists and that this can only be deviated from if such deviation is expressly specified. It is, however, not precluded that Community law also applies in a third coun- 27 try, if there is a link under social legislation to the Community (CJEU, Case 36/74 (Walrave and Koch), EU:C:1974:140 and Case 237/83 (Prodest), EU:C: 984:277; Case C-425/11 (Ettwein), EU:2013:121). A Belgian national hired by a French company in order to post him/her to Thailand can, for example, invoke the collision-of-laws rules of Reg. No. 883/2004 (CJEU, Case C-60/93 (Aldewereld), EU:C:1994:271). Reg. No. 492/2011 also clearly provides for application of the equal treatment obligation laid down in Art. 7 even for residence in a third country (CJEU, Case C-214/94 (Boukhalfa), EU:C:1996:174). The question as to what shall apply if employment is pursued in a territory 28 that cannot be classified so easily still remains to be clarified. Oil platforms come to mind in this respect, that are not erected on the territory of a Member State and cannot be classified in the same manner as the ship of a flag state (cf. CJEU, Case 9/88 (Lopes da Veiga), EU:C:1989:346). Taking into account the Rose Langer

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previously quoted case law concerning the applicability of the obligation of equal treatment in third countries, the view may be taken that such obligation applies wherever a state exercises de facto jurisdictional rights (CJEU, Case 112/75 (Hirardin), EU:C:1976:60). 29 In addition the EEA agreement provides for the right to freedom of movement also applying in Iceland, Liechtenstein and Norway. Although Switzerland has not joined the EEA, it has concluded a bilateral agreement with the EU with regard to freedom of movement (para. 10). 4. Prohibition of discrimination 30

Any discrimination between workers of the Member States based on nationality shall be abolished (Art. 45 TFEU s. 2). The establishment of freedom of movement is not concerned with an aim to be fulfilled in the future, but is in fact an immediately applicable prohibition of discrimination based on nationality. The consequences of the requirement of equal treatment arise in particular due to its broad material scope, because it also includes social advantages in compliance with Reg. No. 492/2011 and the term is very broadly interpreted. The prohibition of discrimination therefore leads to a de facto equal treatment of foreign workers in virtually all life facts and events. It is not permissible, for example, to offer foreign-language assistants only limited contracts, even if there might be an interest in the assistants being still closely linked with their home country (CJEU, Cases C-259/91, C-331/91 and C-332/91 (Allué and Coonan), EU:C: 1993:333). Nevertheless, some important areas, such as the right to vote, are still excluded. Where elections are concerned there is currently only an active and passive right for communal and European Parliament elections in a State other than the State of origin (Art. 22 TFEU). a) Third-party effect

31

The right to equal treatment applies firstly vis-à-vis the respective State whose legislation is the basis of the discrimination and must be observed by the courts ex officio (CJEU, Case 41/74 (van Duyn), EU:C:1974:133). In addition it also takes on a third-party effect, namely in such cases where the State is the employer (CJEU, Case 152/73 (Sotgiu), EU:C:1974:13) and where the employer is a private third party (CJEU, Case C-415/93 (Bosman), EU:C:1995:463; CJEU, Case C-281/98 (Agonese), EU:C:2000:296; CJEU, Case C-325/08 (Bernhard), EU:C:2010:143). b) Indirect discrimination

32

Furthermore, Art. 45 TFEU prohibits not only overt discrimination by reason of nationality, but also all hidden forms of discrimination which, through the application of other distinguishing criteria, lead in fact to the same result (CJEU, Case C-514/12 (Zentralbetriebsrat), EU:C:2013:799). Therefore application of apparently neutral criteria, rules or practices which are in fact disadvantageous 30

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for foreign workers also constitutes discrimination (CJEU, Case C-57/96 (Meints), EU:C:997:564). Unless it is objectively justified and proportionate to its aim, a provision of national law must be regarded as indirectly discriminatory if it is intrinsically liable to affect migrant workers more than national workers and if there is a consequent risk that it will place the former at a particular disadvantage (CJEU, Case C-57/96 (Meints), EU:C:1997:564). Only if the discriminatory treatment can be objectively justified by legitimate aims does this not apply (CJEU, Case C-237/94 (O’Flynn), EU:C:1996:206). In this connection the Court applies criteria similar to those it developed with- 33 in the scope of its case law concerning equal treatment of men and women. The decisive question is whether foreign nationals are affected de facto more than nationals, i.e. possibly in purely numerical terms. The residence requirement is therefore a typical case that leads to covert discrimination and which can place frontier workers in particular at a disadvantage (CJEU, Case C-379/11 (Caves Krier), EU:C:2012:798). But the foreign place of residence of family members can also lead to indirect disadvantages (CJEU, Case C-337/97 (Meeusen), EU:C: 1999:284). The probability that the family of a foreign national have remained in the home country and therefore lives abroad is significantly higher than is the case for nationals. However, equal treatment does not only entail prohibition of differentiation 34 according to place of residence, but also involves other relevant facts and events that have taken place in another Member State. Therefore so-called regulations that provide for the prolongation of periods which serve to maintain entitlement to social benefits can also be met abroad (CJEU, Case 349/87 (Paraschi), EU:C: 1991:372). It is, however, always trickier where periods of military service or unemployment are concerned. The Court was still reluctant, for example to treat periods of foreign military service equally with continuation of the occupational old-age insurance during performance of military service abroad (CJEU, Case C-315/94 (de Vos), EU:C:1996:104). In the meantime it requires prolongation of entitlement to an orphan’s pension in the case of military service abroad (CJEU, Case C-131/96 (Mora Romero), EU:C:1997:317). Equally uncertain is the situation with regard to periods of unemployment. It is not provided for that foreign periods of unemployment should be taken into account for entitlement to an early old-age pension (CJEU, Case 20/75 (d’Amico), EU:C:1975:101). On the other hand where the claim to child allowance is concerned, periods of unemployment of children residing abroad must be taken into account (CJEU, Cases C-228/88 (Bronzino) and C-12/89 (Gatto), EU:C:1990:85). It must be admitted that the result in the Case de Vos is to a certain extent justifiable, as the person concerned was not subject to the social legislation of the State of employment during the period of military service and consequently there is no obligation to compensate these periods within the scope of the statutory pension insurance. So it is understandable that the same concept should be applied to occupational supplementary pensions. Although the Court did not in fact not justify its arguments Rose Langer

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in this way. In any case non-consideration of foreign periods of unemployment where entitlement to an early old-age pension is concerned is probably no longer admissible today – especially in the light of the introduction of a common European employment policy. 5. Prohibition of disadvantage

The decision of the CJEU in the Case Terhoeve is a graphic case indicating that not just discrimination, but even the mere disadvantages of persons who have exercised their right to freedom of movement are to be prohibited (CJEU, Case C-18/95, EU:C:1999:22). The subject matter here concerned the amount of the annual social security contributions that a Dutch national should pay in the Netherlands in the case that although he remained insured under the Dutch social security scheme he was nevertheless posted to the United Kingdom intermittently. Social security contributions are levied by the financial authority in the Netherlands and calculated in accordance with the principles of tax legislation. As a result the person concerned was treated as a resident for part of the fiscal year and as a non-resident for the remaining period. This in turn led to the contributions he had to pay being higher than if he had had a uniform status for the entire year. The Court saw a restriction in the right to freedom of movement in that the exercising of just such right led to higher social security contributions that were not counterbalanced by any higher benefits. In other words not only equal facts are to be treated equally, but measures of the Member States must not have any negative consequences for persons who exercise their right to freedom of movement. Regulations that either alone or in conjunction with other circumstances place migrant workers at a disadvantage fall within the scope of the prohibition of disadvantage (CJEU, Case C-96/85 (Commission/France), EU:C: 986:189). 36 The prohibition of disadvantage therefore has a wider scope than the prohibition of discrimination, because it allows no distinction to be made between nationals or residents on the one hand and foreign nationals or mobile persons on the other. A disadvantage is also given if payment of a private employment agency commissioned by a worker is only effected from public funds if the new employment relationship is in the national State (CJEU, Case C-208/05 (ITC), EU:C:2007:16). 35

6. Justification 37

It is the opinion of the CJEU that cases of unequal treatment can be justified if in an individual case it pursues a legitimate aim compatible with the Treaty and is justified by overriding reasons in the public interest (CJEU, Case C-325/08 (Olympique Lyonnais), EU:C: 2010:143). Where the granting of family benefits to foreign nationals is concerned, the Member States have frequently argued as justification that the promotion of the family is a national pro-birth policy. However, according to the case law of the Court social measures cannot 32

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be considered as falling outside of the scope of the rules of Community law solely because they are granted for reasons of demographic policy (CJEU, Case 65/81 (Reina), EU:C:1982:6). Neither can setting a flat rate for the situation at issue in order to simplify the administrative procedure serve as justification (CJEU, Case 205/84 (Commission/Germany), EU:C:1986:463). Even compensation of advantages that a migrant worker enjoys in contrast to a comparable resident person was not accepted as justification (CJEU, Case C-18/95 (Terhoeve), EU:C:1999:22). 7. Ordre public proviso

Art. 45 (3) TFEU includes an ordre public proviso with regard to access to the 38 foreign labour market and the right of stay. The right to freedom of movement is subject to limitations justified on grounds of public policy, public security or public health. This reservation was specified in more detail in Chapter VI Directive 2004/38/EC. However, as the proviso itself is restricted to justified limitations, it is subject to the review of proportionality (CJEU, Case 8/77 (Sagoulou et al.), EU:C:1977:131; CJEU, Case C-100/01 (Oteiza Olazabal), EU:C: 2002:712). Case law stresses in this connection that the ordre public proviso cannot derogate from the principle of equal treatment. Consequently conduct and omissions that are tolerated by nationals (e.g. prostitution) are not justification for applying the proviso (CJEU, Case 41/74 (van Duyn), EU:C:1974:133). It is of importance for social law in this context that the need for social assistance cannot constitute an ordre public proviso (CJEU, Case 139/85 (Kempf), EU:C:1986:223) if all other conditions for the right of stay are fulfilled. Even in the case of criminal offences as grounds for expulsion, personal conduct or the risk for public policy posed by the offender must be given adequate consideration (CJEU, Case C-482/01 and C-493/01 (Orfanopoulos et al.), EU:C: 2004:262). 8. Exception for public services

The limitation of freedom of movement with regard to access to employment 39 within the scope of public services is a question with which the CJEU has often been confronted. The findings of many judgements indicate that the definition of “public services” must be undertaken in conformity with Community law. Only the core area of public services therefore falls within the definition and not areas organised randomly as public services due to privatisation and (re)nationalisation measures. The core area includes such functions as confer powers by public law and that involve responsibility for safeguarding the general interests of the state (CJEU, Case 149/79 (Commission/Belgium), EU:C:182:195). Only the military, policing and judiciary, legislation and the diplomatic services are therefore fields that can be reserved for a State’s own nationals. In the case of mixed activities the proviso can only be applied if the powers conferred by public law are actually carried out regularly and thus constitute the core of the activity. The Rose Langer

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Court did not accept this as being the case for the captain on a small-scale merchant shipping vessel (CJEU, Case C-47/02 (Anker), EU:C:2002:516). 40 In and as far as a foreign national has gained access to the core area of public services, he/she enjoys the same rights deriving from Art. 45 TFEU in the unreserved fields (CJEU, Case C-187/96 (Commission/Greece), EU:C:1998:101). In the latter case it has relevance especially where the recognition of periods of such employment in another Member State is concerned (CJEU, C-187/96 (Commission/Greece), EU:1998:101; CJEU, Case C-15/96 (Schöning-Kougebetopoulou), EU:C:1998:3).

Article 48 TFEU The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, they shall make arrangements to secure for employed and self-employed migrant workers and their dependants: (a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of several countries; (b) payment of benefits to persons resident in the territories of Member States. Where a member of the Council declares that a draft legislative act referred to in first subparagraph would affect important aspects of its social security system, including its scope, cost or financial structure, or would affect the financial balance of that system, it may request that the matter be referred to the European Council. In that case, the ordinary legislative procedure shall be suspended. After discussion, the European Council shall, within four months of this suspension, either: (a) refer the draft back to the Council, which shall terminate the suspension of the ordinary legislative procedure; or (b) take no action or request the Commission to submit a new proposal; in that case, the act originally proposed shall be deemed not to have been adopted. I. Ratio legis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Personal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Status of the person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Nationality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Aggregation of periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. The export of benefits to other Member States . . . . . . . . . . . . . . . . . . . . . . .

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I. Ratio legis 1

Anyone moving to another Member State for professional reasons normally comes into contact with two different national social security schemes. Initially there was no intention of harmonising the different national social security schemes. In the meantime the Treaty also includes legal grounds for possible harmonisation of social security legislation (Art. 153 TFEU). However, this pos34

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sibility has up to date not been exercised. For this reason the necessity remains to create at least a coordination system for migrant workers. The Council met this objective with Reg. No. 3 and Reg. No. 4, which was replaced at the beginning of the 1970 s by Reg. No. 1408/71 of the Council for implementing the social security schemes for employed persons, self-employed persons and their family members moving within the Community and Reg. No. 574/72 for implementing Reg. No. 1408/71, which after long preparation were in turn replaced by Reg. No. 883/2004 and Reg. No. 987/2009. Since 1983 the coordination Regulations have applied not only to employed persons, but also to self-employed persons. However, the coordination objective still does not apply for nationals of third countries or for the unemployed. The regulation makes no provision for the legal instrument. Consequently, it was possible to base Directive 98/49/ EC of the Council from 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community on this authorisation (OJ L 1998, 209, s. 46). Implementation of the “ordinary legislative procedure” is to be effected on adoption by the Council acting unanimously. However, there is an escape provision as substitution for the veto right. Contrary to old legislation it is not sufficient that a Member State does not agree, it must instead assert “important aspects”. If this is the case, the Member State can apply for the matter to be submitted to the European Council. The European Council can then after discussion refer the draft back to the Council which leads to continuation of the procedure. Should the European Council take no action or should it request the Commission to submit a new proposal, the act originally proposed shall be deemed not to have been adopted. Declaration No. 23 to Art. 48 (2) TFEU prescribes that in the case of dealing with the matter submitted to it, the European Council must act by consensus.

2

3

4

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II. Commentary 1. Coordination

The provision contains only a coordination task. The Court has stressed time 6 and again that this does not entail any harmonisation of the different social security schemes and is not intended to create a uniformly applicable social security scheme (CJEU, Case 313/86 (Lenoir), EU:C:1988:452; CJEU, Case C-562/10 (Commission/Germany), EU:C:2012:442). Nevertheless, coordination is intended to ensure freedom of movement. This means that national rules must be designed in such a way that the objective is achieved; but on the other hand no fundamental amendment is to be made to the national scheme (CJEU, Case C-356/89 (Stanton Newton), EU:C:1991:265). The entire interpretation of Art. 48 TFEU by the Court ranges between these two poles.

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Whereby the borders between supposed impermissible intervention in the structural principles and the measures necessary for achieving freedom of movement are often blurred. This is most apparent in the rule of conflict (Art. 11 et seq.), which clearly goes further than simple coordination. The Regulation bindingly specifies who belongs to the social security scheme of a Member State and under what conditions. Normally the Regulation bases affiliation to a scheme of employment. This always leads to a conflict when affiliation to a social security scheme in a specific country or the right to a specific benefit is applicable for all nationals (this is the case in Germany, for example, with regard to family benefits). In such cases the Regulation then opens access to a scheme for all persons employed in a country, even if the link to employment is irrelevant under national legislation. This entails intervention in the structural principles of a scheme – even if merely selectively – in order to ensure freedom of movement. 8 As only a coordination task is concerned, the Court finds it quite acceptable when the persons to whom the coordination applies are treated more favourably in individual cases than a comparable resident person. The Court has, for example, pronounced reduction provisions provided for only in the Regulation and that have no corresponding regulation under national legislation as incompatible with the coordination objective (CJEU, Case 24/75 (Petroni), EU:C:1975:129). This so-called Petroni principle is ultimately the expression of the heightened need of mobile workers for protection, who are already in danger of being put at a disadvantage by the different structures due to confrontation with two or more social security schemes. However, the Court does not consider there being any obligation to maintain the individual more favourable positions that arise in this connection (CJEU, Case 12/67 (Guisart), EU:C:1967:55; CJEU, Case 22/77 (Mura), EU:C:1977:154). On the contrary, it has only made clear that in the absence of any corresponding national anti-cumulation regulation certain advantages must be accepted and that a gap in the legislation of the national system may not be closed to the disadvantage of the worker on the Regulation level. 7

2. Personal scope a) Status of the person 9

Reg. No. 883/2004 protects not only employed and self-employed persons but also “insured persons”. According to case law this includes all persons that fulfil the conditions of insurance legislation mentioned in the Regulation (cf. in this respect CJEU, Case 182/78 (Pierik II), EU:C:1979:142; CJEU, Case 221/95 (Hervein), EU:C:1997:47). So we are concerned here with a special term under social insurance legislation that refers to the national legislation of the respective Member State. Former employees also clearly fall within the personal scope of Reg. No. 883/2004, provided they are covered by a statutory social insurance scheme (CJEU, Case C-194/96 (Kulzer), EU:C:1998:85).

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Since 1983 the coordination Regulations have applied not only to employed 10 persons, but also to self-employed persons. In the past the legal basis for this extension was the general “catch-all” authorisation of Art. 352 TFEU. Due to the fact that the Court decided that a self-employed person must enjoy rights to the same extent as an employed person and that this right derived directly from the freedom to provide services or the right of residence (CJEU, Case C-53/95 (Kemmler), EU:C:1996:58; CJEU, Cases C-4/95 and C-5/95 (Stöber and Pereira), EU:C:1997:44). Reg. No. 883/2004 no longer includes any restrictions on the rights of self-employed persons vis-à-vis employed persons. In addition the coordination objective in Art. 48 TFEU was extended to include the self-employed by the Treaty of Lisbon. So the term insured person within the meaning of Reg. No. 883/2004 is not identical with the term worker in Art. 45 TFEU. The situation is also different with the interpretation of the term worker within the meaning of Reg. No. 492/2011, which has a stronger labour law orientation. A minimum number of working hours required of workers has no relevance for the application of Reg. No. 883/2004 (CJEU, Case C-2/89 (Kits van Heijningen), EU:C:1990:183). Equally irrelevant is the amount of income achieved by means of the employment (CJEU, Case 300/84 (van Roosmalen), EU:C:1986:402). As a result it is quite possible that although a person has the status of worker within the meaning of Reg. No. 492/2011, due the absence of insurance cover he/she does not fall within the scope of Reg. No. 883/2004. Furthermore, application of Reg. No. 883/2004 does not require movement 11 from one Member State to another for professional reasons. On the contrary tourists, spending their holidays in Europe, are also protected by coordination sickness insurance legislation during their stay abroad in compliance with Art. 19 (CJEU, Case 75/63 (Unger), EU:C:1964:19; CJEU, Case 182/78 (Pierik II), EU:C:1979:142). It is also possible for an insured person to travel to another Member State with the express purpose of receiving specific medical treatment there, provided they receive prior authorisation from the competent health insurance institution (Art. 20). So the motivation for moving is not decisive. Even a person who has not even left his/her home country can invoke the Regulation (CJEU, Case C-194/96 (Kulzer), EU:C:998:85). However, a person protected by the Regulation cannot call upon coordination 12 provisions for purely internal matters. In this respect the CJEU decided that a Walloon residing in the Flemish part of Belgium cannot invoke Art. 76 (7) according to which he would be permitted to express himself in court in his mother tongue (CJEU, Case C-153/91 (Petit), EU:C:1992:354). Even third country nationals who have now been included do not automatically have the required cross-border element, but must have contact to several Member States (CJEU, Cases C-95/99, C-96/99 and C-97/99 (Khalil), EU:C:2001:532).

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b) Nationality 13

Where nationality is concerned the Regulation encompasses not only the nationals of the Member States and the EEA (nationals from Iceland, Liechtenstein and Norway), but also stateless people and refugees. Insured persons from accession states, who do not enjoy freedom of movement due to the application of transitional legislation but who have contact with several social insurance schemes for other reasons, can also claim application of coordination provisions. Family members and survivors of EU or EEA nationals fall within the scope of the Regulation as family members independently of their nationality. Moreover, since 1.1.2011 the provisions concerning social insurance schemes were extended by Reg. No. 1231/10 to include nationals of non-EU countries who have their legal residence in the EU and who are in a cross-border situation. These provisions also apply to their family members and survivors, provided these are resident in the EU. The so-called third-country regulation is relevant in cases where a national of a non-EU country moves from one EU country to another EU country for professional reasons while his/her children remain in the first EU country. However, Reg. No. 1231/10 does not apply in Denmark or the United Kingdom nor in the EEA or Switzerland. With regard to nationals of third countries, the United Kingdom continues to apply Reg. No. 859/2003 in conjunction with Reg. No. 1408/71. 3. Aggregation of periods

14

Art. 48 (a) TFEU emphasises one coordination method, namely the aggregation of periods. This method is in the last instance nothing more than a mechanism for preventing indirect discrimination. It enables periods relevant to social insurance legislation completed in another Member State to be taken into account. It therefore concerns a case of equal treatment of facts. The individual conditions and procedures pertaining to how and when this equal treatment is to be effected are given in Reg. No. 883/2004, in particular in Art. 6. 4. The export of benefits to other Member States

The second coordination principle expressly indicated is the benefit payment to persons resident in the territory of the Member States, i.e. the provision of benefits in a State in which the person concerned is not insured or that bears no financial responsibility for the benefit. This principle is generally known as the export principle. However, this not an entirely complete description of the objective. In addition to the export principle, benefits can also be provided by the State of residence in accordance with the integration principle, whereby remuneration is made by the competent State under certain circumstances. 16 Implementation of the export principle embodied in Art. 48 (b) TFEU is effected via Art. 7, in which the residency provision for cash benefits is revoked. As these benefits concern acquired claims that are paid in cash, there is no prob15

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lem involved with transferring the money to other Member States. The very nature of benefits in kind, such as medical care for example, makes it impossible to export them. For this reason they are provided by the respective State of residence in accordance with the legislation it applies and remunerated between the institutions in compliance with the respective provisions of the coordination Regulation. Where unemployment benefits are concerned the export of cash benefits continues to be permissible only to a limited extent (Art. 63 et seq.). The principle of integration is also applied here instead of that of export. In some cases where unemployment benefits are provided pursuant to the principle of integration the cash benefits provided must be remunerated by the State of prior employment. In the opinion of the Court the provision of unemployment benefits pursuant to the principle of integration is not to be criticised (CJEU, Case 39/76 (Mouthaan), EU:C:1976:181). Even the fact that unemployment benefits can be exported for an unemployed person who does not fall under the exception for frontier workers, for a period of only three months is regarded by the Court as compatible with the Treaty (CJEU, Case C-62/91 (Gray), EU:C:1992:177). Moreover, since 1992 (Reg. No. 1247/92 from 30 April 1992, OJ L 136, s. 1) it has been possible to provide special non-contributory cash benefits in compliance with the principle of integration without an entitlement to such provision (Art. 70). These benefits must be paid abroad if they are listed in Annex X to the Regulation. They concern benefits that have the features of classic cash of social security benefits on the one hand while at the same time featuring elements of social assistance. The Court held the provision of these social benefits pursuant to the principle of integration instead of the export system for admissible (CJEU, Case C-20/96 (Snares), EU:C:1997:518 and CJEU, Case C-297/96 (Partridge), EU:C:1998:280). There are two reasons in favour of this result: firstly Art. 48 TFEU can be interpreted to mean that payment in other Member States is not identical with an export, but instead applies solely to the provision of benefits in other Member States, which is likewise ensured by the integration system. Secondly, Art. 48 TFEU mentions only two of several coordination provisions, which are to be “especially” observed. So even if one is of the opinion that payment in other Member States presupposes the export, agreeing other coordination provisions is not precluded. This applies in particular where the objective of the export principle can be justified in individual cases. However, instead of the export obligation, the non-contributory benefits must be provided for all persons resident in the respective State who fulfil the same conditions. So anyone residing in Belgium but receiving a German pension is entitled to the Belgian minimum pension even if this person was never employed in Belgium. Account must also be taken when providing such benefits pursuant to the principle of integration that this is effected without discrimination (CJEU, Case C-90/97 (Swaddling), EU:C:1999:96). Without discrimination Rose Langer

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also means in this connection that persons who have exercised their right of freedom of movement must not be put at a disadvantage. For this reason waiting periods are inadmissible, even if they apply equally to habitually resident and mobile persons. 21 One point that remains to be clarified concerns whether and how entitlement to these minimum benefits in the current country of residence influences the right to residence. According to Directive 2004/38/EC permanent residence in another Member State is subject to the person concerned having both sufficient resources and comprehensive sickness insurance cover. However, this conditional right to residence is interpreted by the CJEU in view of the Union citizenship (Art. 21 TFEU) and the general prohibition of discrimination (Art. 18 TFEU). For this reason a student whose right to residence has been acknowledged, but who during his/her course of studies has recourse to social assistance, can claim such benefit as a European citizen (CJEU, Case C-184/99 (Grzelczyk), EU:C: 2001:458). However, such right to residence can require verification in such cases, whereby the principle of proportionality must be taken into account (CJEU, Case C-456/02 (Trojani), EU:C:2004:488). Taking this case law into consideration Art. 14 (3) Directive 2004/38/EC stipulates that an expulsion measure shall not be the automatic consequence of a Union citizen’s recourse to social assistance benefits (CJEU, Case C-140/12 (Brey), EU:C:2013:565). Nevertheless, the CJEU decided that persons who are neither employed persons nor job seekers and who have no right to residence can be excluded from receiving social benefits (CJEU, Case C-333/13 (Dano), EU:C:2014:2358).

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Part 2: Regulation (EC) No 883/2004 REGULATION (EC) No 883/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004 on the coordination of social security systems (Text with relevance for the EEA and for Switzerland) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Articles 42 and 308 thereof, Having regard to the proposal from the Commission presented after consultation with the social partners and the Administrative Commission on Social Security for Migrant Workers1, Having regard to the opinion of the European Economic and Social Committee2, Acting in accordance with the procedure laid down in Article 251 of the Treaty3, Whereas: (1) The rules for coordination of national social security systems fall within the framework of free movement of persons and should contribute towards improving their standard of living and conditions of employment. (2) The Treaty does not provide powers other than those of Article 308 to take appropriate measures within the field of social security for persons other than employed persons. (3) Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community ( 4 ) has been amended and updated on numerous occasions in order to take into account not only developments at Community level, including judgments of the Court of Justice, but also changes in legislation at national level. Such factors have played their part in making the Community coordination rules

1 2 3

OJ C 38, 12.2.1999, p. 10. OJ C 75, 15.3.2000, p. 29. Opinion of the European Parliament of 3 September 2003 (not yet published in the Official Journal). Council Common Position of 26 January 2004 (OJ C 79 E, 30.3.2004, p. 15) and Position of the European Parliament of 20 April 2004 (not yet published in the Official Journal). Decision of the Council of 26 April 2004.

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complex and lengthy. Replacing, while modernising and simplifying, these rules is therefore essential to achieve the aim of the free movement of persons. (4) It is necessary to respect the special characteristics of national social security legislation and to draw up only a system of coordination. (5) It is necessary, within the framework of such coordination, to guarantee within the Community equality of treatment under the different national legislation for the persons concerned. (6) The close link between social security legislation and those contractual provisions which complement or replace such legislation and which have been the subject of a decision by the public authorities rendering them compulsory or extending their scope may call for similar protection with regard to the application of those provisions to that afforded by this Regulation. As a first step, the experience of Member States who have notified such schemes might be evaluated. (7) Due to the major differences existing between national legislation in terms of the persons covered, it is preferable to lay down the principle that this Regulation is to apply to nationals of a Member State, stateless persons and refugees resident in the territory of a Member State who are or have been subject to the social security legislation of one or more Member States, as well as to the members of their families and to their survivors. (8) The general principle of equal treatment is of particular importance for workers who do not reside in the Member State of their employment, including frontier workers. (9) The Court of Justice has on several occasions given an opinion on the possibility of equal treatment of benefits, income and facts; this principle should be adopted explicitly and developed, while observing the substance and spirit of legal rulings. (10) However, the principle of treating certain facts or events occurring in the territory of another Member State as if they had taken place in the territory of the Member State whose legislation is applicable should not interfere with the principle of aggregating periods of insurance, employment, self-employment or residence completed under the legislation of another Member State with those completed under the legislation of the competent Member State. Periods completed under the legislation of another Member State should therefore be taken into account solely by applying the principle of aggregation of periods. (11) The assimilation of facts or events occurring in a Member State can in no way render another Member State competent or its legislation applicable. (12) In the light of proportionality, care should be taken to ensure that the principle of assimilation of facts or events does not lead to objectively un-

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justified results or to the overlapping of benefits of the same kind for the same period. (13) The coordination rules must guarantee that persons moving within the Community and their dependants and survivors retain the rights and the advantages acquired and in the course of being acquired. (14) These objectives must be attained in particular by aggregating all the periods taken into account under the various national legislation for the purpose of acquiring and retaining the right to benefits and of calculating the amount of benefits, and by providing benefits for the various categories of persons covered by this Regulation. (15) It is necessary to subject persons moving within the Community to the social security scheme of only one single Member State in order to avoid overlapping of the applicable provisions of national legislation and the complications which could result therefrom. (16) Within the Community there is in principle no justification for making social security rights dependent on the place of residence of the person concerned; nevertheless, in specific cases, in particular as regards special benefits linked to the economic and social context of the person involved, the place of residence could be taken into account. (17) With a view to guaranteeing the equality of treatment of all persons occupied in the territory of a Member State as effectively as possible, it is appropriate to determine as the legislation applicable, as a general rule, that of the Member State in which the person concerned pursues his/her activity as an employed or self-employed person. (17 a) Once the legislation of a Member State becomes applicable to a person under Title II of this Regulation, the conditions for affiliation and entitlement to benefits should be defined by the legislation of the competent Member State while respecting Community law. (18) In specific situations which justify other criteria of applicability, it is necessary to derogate from that general rule. (18 a) The principle of single applicable legislation is of great importance and should be enhanced. This should not mean, however, that the grant of a benefit alone, in accordance with this Regulation and comprising the payment of insurance contributions or insurance coverage for the beneficiary, renders the legislation of the Member State, whose institution has granted that benefit, the applicable legislation for that person. (18 b) In Annex III to Council Regulation (EEC) No 3922/91 of 16 December 1991 on the harmonization of technical requirements and administrative procedures in the field of civil aviation (5), the concept of ‘home base’ for flight crew and cabin crew members is defined as the location nominated by the operator to the crew member from where the crew member normally starts and ends a duty period, or a series of duty periods, and where, under normal conditions, the operator is not responsible for the accommo-

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dation of the crew member concerned. In order to facilitate the application of Title II of this Regulation for flight crew and cabin crew members, it is justified to use the concept of ‘home base’ as the criterion for determining the applicable legislation for flight crew and cabin crew members. However, the applicable legislation for flight crew and cabin crew members should remain stable and the home base principle should not result in frequent changes of applicable legislation due to the industry’s work patterns or seasonal demands. (19) In some cases, maternity and equivalent paternity benefits may be enjoyed by the mother or the father and since, for the latter, these benefits are different from parental benefits and can be assimilated to maternity benefits strictu sensu in that they are provided during the first months of a newborn child's life, it is appropriate that maternity and equivalent paternity benefits be regulated jointly. (20) In the field of sickness, maternity and equivalent paternity benefits, insured persons, as well as the members of their families, living or staying in a Member State other than the competent Member State, should be afforded protection. (21) Provisions on sickness, maternity and equivalent paternity benefits were drawn up in the light of Court of Justice case-law. Provisions on prior authorisation have been improved, taking into account the relevant decisions of the Court of Justice. (22) The specific position of pension claimants and pensioners and the members of their families makes it necessary to have provisions governing sickness insurance adapted to this situation. (23) In view of the differences between the various national systems, it is appropriate that Member States make provision, where possible, for medical treatment for family members of frontier workers in the Member State where the latter pursue their activity. (24) It is necessary to establish specific provisions regulating the non-overlapping of sickness benefits in kind and sickness benefits in cash which are of the same nature as those which were the subject of the judgments of the Court of Justice in Case C-215/99 Jauch and C-160/96 Molenaar, provided that those benefits cover the same risk. (25) In respect of benefits for accidents at work and occupational diseases, rules should be laid down, for the purpose of affording protection, covering the situation of persons residing or staying in a Member State other than the competent Member State. (26) For invalidity benefits, a system of coordination should be drawn up which respects the specific characteristics of national legislation, in particular as regards recognition of invalidity and aggravation thereof.

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(27) It is necessary to devise a system for the award of old-age benefits and survivors' benefits where the person concerned has been subject to the legislation of one or more Member States. (28) There is a need to determine the amount of a pension calculated in accordance with the method used for aggregation and pro rata calculation and guaranteed by Community law where the application of national legislation, including rules concerning reduction, suspension or withdrawal, is less favourable than the aforementioned method. (29) To protect migrant workers and their survivors against excessively stringent application of the national rules concerning reduction, suspension or withdrawal, it is necessary to include provisions strictly governing the application of such rules. (30) As has constantly been reaffirmed by the Court of Justice, the Council is not deemed competent to enact rules imposing a restriction on the overlapping of two or more pensions acquired in different Member States by a reduction of the amount of a pension acquired solely under national legislation. (31) According to the Court of Justice, it is for the national legislature to enact such rules, bearing in mind that it is for the Community legislature to fix the limits within which the national provisions concerning reduction, suspension or withdrawal are to be applied. (32) In order to foster mobility of workers, it is particularly appropriate to facilitate the search for employment in the various Member States; it is therefore necessary to ensure closer and more effective coordination between the unemployment insurance schemes and the employment services of all the Member States. (33) It is necessary to include statutory pre-retirement schemes within the scope of this Regulation, thus guaranteeing both equal treatment and the possibility of exporting pre-retirement benefits as well as the award of family and health-care benefits to the person concerned, in accordance with the provisions of this Regulation; however, the rule on the aggregation of periods should not be included, as only a very limited number of Member States have statutory pre-retirement schemes. (34) Since family benefits have a very broad scope, affording protection in situations which could be described as classic as well as in others which are specific in nature, with the latter type of benefit having been the subject of the judgments of the Court of Justice in Joined Cases C-245/94 and C-312/94 Hoever and Zachow and in Case C-275/96 Kuusijärvi, it is necessary to regulate all such benefits. (35) In order to avoid unwarranted overlapping of benefits, there is a need to lay down rules of priority in the case of overlapping of rights to family benefits under the legislation of the competent Member State and under the legislation of the Member State of residence of the members of the family.

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(36) Advances of maintenance allowances are recoverable advances intended to compensate for a parent's failure to fulfil his/her legal obligation of maintenance to his/her own child, which is an obligation derived from family law. Therefore, these advances should not be considered as a direct benefit from collective support in favour of families. Given these particularities, the coordinating rules should not be applied to such maintenance allowances. (37) As the Court of Justice has repeatedly stated, provisions which derogate from the principle of the exportability of social security benefits must be interpreted strictly. This means that they can apply only to benefits which satisfy the specified conditions. It follows that Chapter 9 of Title III of this Regulation can apply only to benefits which are both special and non-contributory and listed in Annex X to this Regulation. (38) It is necessary to establish an Administrative Commission consisting of a government representative from each Member State, charged in particular with dealing with all administrative questions or questions of interpretation arising from the provisions of this Regulation, and with promoting further cooperation between the Member States. (39) The development and use of data-processing services for the exchange of information has been found to require the creation of a Technical Commission, under the aegis of the Administrative Commission, with specific responsibilities in the field of data-processing. (40) The use of data-processing services for exchanging data between institutions requires provisions guaranteeing that the documents exchanged or issued by electronic means are accepted as equivalent to paper documents. Such exchanges are to be carried out in accordance with the Community provisions on the protection of natural persons with regard to the processing and free movement of personal data. (41) It is necessary to lay down special provisions which correspond to the special characteristics of national legislation in order to facilitate the application of the rules of coordination. (42) In line with the principle of proportionality, in accordance with the premise for the extension of this Regulation to all European Union citizens and in order to find a solution that takes account of any constraints which may be connected with the special characteristics of systems based on residence, a special derogation by means of an Annex XI — ‘DENMARK’ entry, limited to social pension entitlement exclusively in respect of the new category of non-active persons, to whom this Regulation has been extended, was deemed appropriate due to the specific features of the Danish system and in the light of the fact that those pensions are exportable after a 10-year period of residence under the Danish legislation in force (Pension Act). (43) In line with the principle of equality of treatment, a special derogation by means of an Annex XI — ‘FINLAND’ entry, limited to residence-based

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national pensions, is deemed appropriate due to the specific characteristics of Finnish social security legislation, the objective of which is to ensure that the amount of the national pension cannot be less than the amount of the national pension calculated as if all insurance periods completed in any Member State were completed in Finland. (44) It is necessary to introduce a new Regulation to repeal Regulation (EEC) No 1408/71. However, it is necessary that Regulation (EEC) No 1408/71 remain in force and continue to have legal effect for the purposes of certain Community acts and agreements to which the Community is a party, in order to secure legal certainty. (45) Since the objective of the proposed action, namely the coordination measures to guarantee that the right to free movement of persons can be exercised effectively, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and effects of that action, be better achieved at Community level, the Community may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality as set out in that article, this Regulation does not go beyond what is necessary, in order to achieve that objective, HAVE ADOPTED THIS REGULATION:

Title I General Provisions Bibliography: Christensen/Malmstedt, Lex Loci Laboris versus Loci Dimicilii, EJSS 2000, p. 69; Cornelissen, The principle of territoriality and the Community regulations on social security, CMLR 33 (1996), p. 439-471; Cornelissen, Third country nationals and the European Coordination of Social Security, EJSS 2008, p. 347-371; Cornelissen, Les axes de réforme et les principes généraux du règlement no 883/2004, RDSS 2010, p. 5; Devetzi, Auswirkungen des Wohnsitzverlegung auf den Europäischen Sozialrechts, ZESAR 2009, p. 63; Eichenhofer, Sozialrecht der Europäischen Union, 2013 (5th ed); Fuchs, Was bringt die neue VO (EG) Nr. 883/2004, SGb 2008, p. 201; Fuchs, Massnahmen der Arbeitsmarktaktivierung und Koordinationsrecht, Recht der Arbeit, 2015, Heft 1); Jorens/Van Overmeiren, General principles of coordination in Regulation 883/2004, EJSS 2009, p. 47-80; Marhold (ed), Das neue Sozialrecht der EU, 2005; Pennings, European Social Security Law, 2010 (5th ed); Pieters/ Schoukens (eds), The social security coordination between the EU and non-EU countries, 2009, Rennuy, Assimilation, territoriality and reverse discrimination: a shift in European social security law, EJSS 2011, p. 289-320; Spiegel, die neue europäische Sozialrechtkoordinierung. Überlegungen zur Verordung (EG) Nr. 883/2004, ZIAS 2006, p. 85; Van Raepenbusch, La sécurité sociale des travailleuers européens. Principes directeurs et grands arrêts de la Cour de justice des Communautés européennes, 2001; Verschueren, The renewed EU social

Bettina Kahil-Wolff

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Part 2: Regulation (EC) No 883/2004 security coordination in Regulation No 883/2004 and its link with bilateral tax agreements, EC Tax Review 2012, issue 2, vol. 21, p. 98-112.

Overview Title I (Art. 1-10) contains some important general provisions: Art. 1 defines legal terms, Arts. 2, 3 and 9 delimit the personal and material scope of the Regulation, Arts. 4-7 lay down the main principles regarding the coordination of social security systems (equality of treatment/equal treatment of facts including aggregation of periods and waiving of residence rules) and Art. 8 clarifies the relationship between the Regulation and International Law; a more specific question (overlapping of benefits) is subject to Art. 10. Title I has the function of a General Part. It applies to all the other Titles of the Regulation and hence avoids repetition. Art. 6, for example, requires the aggregation of periods for all branches of social security which fall within the scope of the Regulation; the numerous aggregation rules contained in former Reg. No. 1408/71 became superfluous. Some special rules, however, had to be maintained, mainly in the fields of sickness, maternity, work accidents and work diseases where access to health care requires particular mechanisms (see, e.g., Art. 35 concerning reimbursements between institutions). Like any other General Part of a Code, Title I must suffer exceptions: Art. 61 and Art. 64 concerning unemployment benefits derogate from the principles of aggregation of periods and waiving of residence rules, Art. 70 concerning non-contributory cash benefits from the waiving of residence rules, etc. The only general rule, which applies without any exception is Art. 4 because Reg. No. 883/2004 prohibits discrimination on the ground of nationality in every branch of social security, for all individuals and benefits covered by EU-coordination law; for this extent, EU-Law differs from the more restrictive International Social Security Agreements. 2 The goal of Reg. No. 883/2004 is coordination of the national social security systems in order to encourage free movement of persons. The fundamental principles necessary to achieve this goal are anchored in Title I, Arts. 4-7. Equality of treatment is set forth in Art. 4; the case-law related to this provision is extensive (see commentary to Art. 4 hereafter). “Equality of treatment” must be distinguished from “equal treatment of facts” as formulated in Art. 5. The latter requires assimilation of factual circumstances but not persons; it has two specific implementations: aggregation of periods (Art. 6) and waiving of residence rules (Art. 7). These two last Articles repeat the rules laid down in Art. 48 TFEU; they are as old as the European Communities. The rule provided by Art. 5 is not completely new because it absorbs some case-law of the Court of Justice requiring that the Member State take into account foreign periods as though they had been completed in the national territory (case C-135/99 (Elsen), EU:C:2000:647, para. 36; periods devoted to child-rearing). The rule is formulated in quite an ab1

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Bettina Kahil-Wolff

Overview

stract manner; there are no judgments for the moment to substantiate the content. Title I is not the only part of the Regulation which provides general rules. Ti- 3 tle V, for example (Arts. 76-86 – Miscellaneous Provisions) requires a fair trial (Art. 76 (4)(2) and data protection in all fields of social coordination (Art. 77). Art. 85 protects the rights of social security institutions against third parties. There are also general rules which apply only to parts of the Regulation, such as Art. 35 mentioned above: this provision applies to benefits in respect of sickness and work accidents. It should moreover be noted that Reg. No. 987/2004, which lays down the procedure for implementing Reg. No. 883/2004, also starts with a General Part (see Title I – General Provisions, Arts. 1-13 Reg. No. 987/2009). This Part contains legal definitions; it also includes rules concerning cooperation, exchange of data and other procedures. Art. 10 Reg. No. 987/2009 specifies how to proceed in case of overlapping benefits (Art. 10 Reg. No. 883/2004) and Art. 12 Reg. No. 987/2009, how institutions must interact while applying Art. 6 Reg. No. 883/2004 (aggregation of periods). Some general rules governing EU-coordination law are not expressly men- 4 tioned either in Title I, or in other parts of the Regulation. There is, for example, no provision about how to treat preliminary questions, such as “Who is a widow?” or “To whom does the child belong.” They might require consulting private law and private international law. Some principles are taken for granted because they are regulated by the Treaties or by other legal acts. This is true for the territorial scope of the Regulations which apply to the territories of the Member States (Art. 355 TFEU = ex-Article 299 TEC; see also Case C-266/13 (Kik), EU:C:2015:188, para. 43: the employment relationship can be relevant to establish a connection between an activity carried out outside the EU, and the EU territory). Nationals of third countries rely on Reg. No. 1231/2010 (OJ 2010, L 344/1). Reg. No. 883/2004 also assumes that it is applicable only to transnational situations (cf. Art. 45 TFEU), that it is binding and directly applicable in all Member States (Art. 288 (2) TFEU = ex-Article 249 (2) TEC), furthermore that violations may entail the liability of the latter (Case C-118/00 (Larsy), EU:C: 2001:368, para. 35) and that the aim of Arts. 45 and 48 TFEU would not be attained if persons were to lose advantages conferred on them by national law (Case 24/75 (Petroni), EU:C:1975:129, para. 13). The implementation of the Petroni-Principle in Art. 8 goes back to the Rönfeldt-Case (Case C-227/89 (Rönfeldt), EU:C:1991:52; see most recently Case C-401/13 (Balzas), EU:C: 2015:26). Finally, Title I does not mention the fact that Reg. No. 883/2004 and Reg. No. 987/2009 also coordinate the EEA countries’ and Switzerland’s social security systems. Therefore, the indication in the very beginning of the Regulation is helpful; it reminds us that Reg. No. 883/2004 is a “Text with relevance for the EEA and for Switzerland”.

Bettina Kahil-Wolff

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Article 1 Definitions For the purposes of this Regulation: (a) "activity as an employed person" means any activity or equivalent situation treated as such for the purposes of the social security legislation of the Member State in which such activity or equivalent situation exists; (b) "activity as a self-employed person" means any activity or equivalent situation treated as such for the purposes of the social security legislation of the Member State in which such activity or equivalent situation exists; (c) "insured person", in relation to the social security branches covered by Title III, Chapters 1 and 3, means any person satisfying the conditions required under the legislation of the Member State competent under Title II to have the right to benefits, taking into account the provisions of this Regulation; (d) "civil servant" means a person considered to be such or treated as such by the Member State to which the administration employing him is subject; (e) "special scheme for civil servants" means any social security scheme which is different from the general social security scheme applicable to employed persons in the Member State concerned and to which all, or certain categories of, civil servants are directly subject; (f) "frontier worker" means any person pursuing an activity as an employed or selfemployed person in a Member State and who resides in another Member State to which he returns as a rule daily or at least once a week; (g) "refugee" shall have the meaning assigned to it in Article 1 of the Convention relating to the Status of Refugees, signed in Geneva on 28 July 1951; (h) "stateless person" shall have the meaning assigned to it in Article 1 of the Convention relating to the Status of Stateless Persons, signed in New York on 28 September 1954; (i) "member of the family" means (1) (i) any person defined or recognised as a member of the family or designated as a member of the household by the legislation under which benefits are provided; (ii) with regard to benefits in kind pursuant to Title III, Chapter 1 on sickness, maternity and equivalent paternity benefits, any person defined or recognised as a member of the family or designated as a member of the household by the legislation of the Member State in which he resides; (2) If the legislation of a Member State which is applicable under subparagraph (1) does not make a distinction between the members of the family and other persons to whom it is applicable, the spouse, minor children, and dependent children who have reached the age of majority shall be considered members of the family; (3) If, under the legislation which is applicable under subparagraphs (1) and (2), a person is considered a member of the family or member of the household only if he/she lives in the same household as the insured person or pensioner, this condition shall be considered satisfied if the person in question is mainly dependent on the insured person or pensioner; (j) "residence" means the place where a person habitually resides; (k) "stay" means temporary residence; (l) "legislation" means, in respect of each Member State, laws, regulations and other statutory provisions and all other implementing measures relating to the social security branches covered by Article 3(1); This term excludes contractual provisions other than those which serve to implement an insurance obligation arising from the laws and regulations referred to in 50

Article 1

(m) (n) (o) (p) (q)

(r)

(s) (t)

(u)

(v) (va)

the preceding subparagraph or which have been the subject of a decision by the public authorities which makes them obligatory or extends their scope, provided that the Member State concerned makes a declaration to that effect, notified to the President of the European Parliament and the President of the Council of the European Union. Such declaration shall be published in the Official Journal of the European Union; "competent authority" means, in respect of each Member State, the Minister, Ministers or other equivalent authority responsible for social security schemes throughout or in any part of the Member State in question; "Administrative Commission" means the commission referred to in Article 71; "Implementing Regulation" means the Regulation referred to in Article 89; "institution" means, in respect of each Member State, the body or authority responsible for applying all or part of the legislation; "competent institution" means: (i) the institution with which the person concerned is insured at the time of the application for benefit; or (ii) the institution from which the person concerned is or would be entitled to benefits if he/she or a member or members of his family resided in the Member State in which the institution is situated; or (iii) the institution designated by the competent authority of the Member State concerned; or (iv) in the case of a scheme relating to an employer's obligations in respect of the benefits set out in Article 3(1), either the employer or the insurer involved or, in default thereof, the body or authority designated by the competent authority of the Member State concerned; "institution of the place of residence" and "institution of the place of stay" mean respectively the institution which is competent to provide benefits in the place where the person concerned resides and the institution which is competent to provide benefits in the place where the person concerned is staying, in accordance with the legislation administered by that institution or, where no such institution exists, the institution designated by the competent authority of the Member State concerned; "competent Member State" means the Member State in which the competent institution is situated; "period of insurance" means periods of contribution, employment or self-employment as defined or recognised as periods of insurance by the legislation under which they were completed or considered as completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to periods of insurance; "period of employment" or "period of self-employment" mean periods so defined or recognised by the legislation under which they were completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to periods of employment or to periods of self-employment; "period of residence" means periods so defined or recognised by the legislation under which they were completed or considered as completed; "Benefits in kind" means: (i) for the purposes of Title III, Chapter 1 (sickness, maternity and equivalent paternity benefits), benefits in kind provided for under the legislation of a Member State which are intended to supply, make available, pay directly or

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Part 2: Regulation (EC) No 883/2004 reimburse the cost of medical care and products and services ancillary to that care. This include long-term care benefits in kind; (ii) for the purposes of Title III, Chapter 2 (accidents at work and occupational diseases), all benefits in kind relating to accidents at work and occupational diseases as defined in point (i) above and provided for under the Member States’ accidents at work and occupational diseases schemes; (w) "pension" covers not only pensions but also lump-sum benefits which can be substituted for them and payments in the form of reimbursement of contributions and, subject to the provisions of Title III, revaluation increases or supplementary allowances; (x) "pre-retirement benefit" means: all cash benefits, other than an unemployment benefit or an early old-age benefit, provided from a specified age to workers who have reduced, ceased or suspended their remunerative activities until the age at which they qualify for an old-age pension or an early retirement pension, the receipt of which is not conditional upon the person concerned being available to the employment services of the competent State; "early old-age benefit" means a benefit provided before the normal pension entitlement age is reached and which either continues to be provided once the said age is reached or is replaced by another oldage benefit; (y) "death grant" means any one-off payment in the event of death excluding the lump-sum benefits referred to in subparagraph (w); (z) "family benefit" means all benefits in kind or in cash intended to meet family expenses, excluding advances of maintenance payments and special childbirth and adoption allowances mentioned in Annex I. I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Definitions provided under Art. 1 Reg. No. 883/2004. . . . . . . . . . . . . . . . . . . . 1. Spirit and purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Commentary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) - b) Activity as an employed person, activity as a selfemployed person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Insured person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) - e) Civil servant, special scheme for civil servants . . . . . . . . . . . f) Frontier worker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g) - h) Refugee, stateless person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i) Member of the family. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . j) - k) Residence, stay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l) Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . m) Competent authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . n) - o) Administrative Commission, Implementing Regulation . . p) - q) Institution, competent institution . . . . . . . . . . . . . . . . . . . . . . . . . . . r) Institution of the place of residence, institution of the place of stay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . s) Competent Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . t) - v) Period of insurance, period of employment, period of residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . va) - z) Benefits in kind, pension, pre-retirement, death grant, family benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Legal terms not expressly defined by Art. 1 Reg. No. 883/2004 . . . . . . . .

1 2 2 3 3 6 7 10 12 13 14 15 17 18 19 20 21 22 23 27

I. Introduction 1

Art. 1 is the first provision of Title I in Reg. No. 883/2004 (“General provisions”) but it is not the very beginning of the Regulation because the Recitals

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(see above “Whereas: 1-45”) are part of the act (Art. 296 (2) TFEU = exArt. 253 TEC). The recitals set out the principal issues of the law; they explain the reasoning which was the basis for the legislator’s decisions and therefore may influence the interpretation of the legal act (Case C-24/62 (Germany/ Commission), EU:C:1963:14, para. 64). Art. 1, which provides information about how to understand several rules laid down in the Regulation, may similarly influence its interpretation. Art. 1 defines terms used in the Regulation such as “frontier worker”, “residence” and “stay” or “family benefit”. Such terms are mostly intended to have a particular technical meaning. Thus Art. 1 clarifies EU coordination law and helps to grant free movement of persons within the European Union. The other “General provisions” of Title I formulate some important principles, such as equality of treatment (Art. 4) and assimilation of facts (Art. 5); they also limit the personal and material scope of Reg. No. 883/2004 (Art. 2, 3 and 9), state the relationship between the Regulation and international law (Art. 8) and prohibit overlapping of benefits (Art. 9). Unlike those articles, Art. 1 Reg. No. 883/2004 does not contain a regular legal rule but a large number of legal definitions which need to be applied together with at least one other article of the Regulation. Art. 1 is not the only provision to give legal definitions. Other rules defining legal terms can be found in the recitals mentioned above (see for instance Recitals 18 b and 36), in other articles of Reg. No. 883/2004 (see for instance Art. 44 and 70), in Art. 1 Reg. No. 987/2009 as well as in other articles of Reg. No. 987/2009 (see especially Art. 14 which gives the definition of terms used for the determination of the applicable legislation), in the annexes of Reg. No. 883/2004 and in the Decisions of the Administrative Commission (see Art. 72 Reg. No. 883/2004). Although Art. 1 is focused on Member State law in the field of “social security” it does not contain a definition of this term. A definition of “social security” is based on settled case law (Case C-399/09 (Landtová), EU:C:2011:415). Previous acts (Reg. No. 3/58, OJ No. 30, p. 561, and Reg. No. 1408/71) had rules similar to Art. 1 Reg. No. 883/2004. According to transitional rules, Art. 1 Reg. No. 1408/71 still might apply. The following comment focuses on the definitions laid down in Art. 1 (section II. below); it also gives some indications concerning how to interpret terms which are not expressly defined in this Article (section III.). It must be borne in mind that the Regulation cannot be exhaustive and that some terms need to be specified by the judge (see for instance Case C-321/12 (van der Helder and Farrington) EU:C:2013:648, concerning the term “legislation” within the meaning of Art. 24). II. Definitions provided under Art. 1 Reg. No. 883/2004 1. Spirit and purpose

As previously mentioned, Art. 1 provides definitions of terms in order to en- 2 sure the correct application of EU coordination law. These definitions were elabBettina Kahil-Wolff

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orated for “the purposes of this Regulation” (Reg. No. 883/2004), which means first that they are related to terms and expressions used in Reg. No. 883/2004. The formulation also reminds the reader that the interpretation of rules based on the Treaties must be compatible with the final aims pursued by EU coordination law. Therefore, several terms have a specific meaning within the context of that Regulation and their content may be different from that under national law. Words, for example, like “frontier worker”, “member of a family” or “residence” are frequently used in national legislation and could have several meanings; within the scope of Reg. No. 883/2004, however, solely the definitions provided by Art. 1 are relevant. Other expressions mentioned in Art. 1 are proper to European coordination law because they refer to institutions or acts which were created by European law. This is true for the terms “Administrative Commission” and “Implementing Regulation”. With respect to “refugees” and “stateless persons”, Reg. No. 883/2004 points to international law (the Geneva and New York Conventions of 1951 and 1954). Sometimes it may be necessary to complete a definition as provided under Art. 1 and thus include facts which are not expressly mentioned (see Case C-100/63 (Van der Veen), EU:C:1964:65 related to Art. 1 of early Reg. No. 3 where the Court pointed out that the term “legislation” also covers national legislation related to social security benefits even if such legislation entered into force after the effective date of the Regulation). The Court subsequently felt it necessary to explain that the word “legislation” includes rules drawn up in the form of private law if they are integrated into Member State law and designed to supplement, or be a substitute for, public social security law (Case C-61/65 (Vaassen-Göbbels), EU:C:1966:39). On the other hand, Reg. No. 883/2004 regulates the coordination among the social security schemes of 28 Member States and those schemes differ from one another. Hence, Art. 1 contains some definitions directly related to national law. The most important example is Art. 1 subparagraphs a) and b) of Reg. No. 883/2004. These letters define the word “activity” by referring to the social security legislation of the Member State in which the activity is carried out. As a consequence, the application of several rules laid down in Reg. No. 883/2004 depends on the personal scope of national law. There are also other definitions in Art. 1 which refer to national law, such as “insured person” in subpara. c), “civil servant” in subpara. d) or “member of the family” in subpara. i); these definitions will be discussed below. 2. Commentary a) - b) Activity as an employed person, activity as a self-employed person 3

The terms used in subparagraphs a) and b) of Art. 1 have an important role to play within the coordination system, mostly because they help to determine the applicable legislation (see especially Art. 11 (3) (a) and Art. 12 (1)). There are also other rules, which refer to “activities as an employed or self-employed per-

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son”, for instance the priority rules concerning family benefits (Art. 68). Their task differs from the similar formulation used by former Art. 1 of Reg. No. 1408/71. The latter referred to “employed persons and self-employed persons” in order to determine the personal scope of Reg. No. 1408/71 which only applied to “employed or self-employed persons” and “students” (Art. 2 Reg. No. 1408/71). The new Regulation is much broader. According to Art. 2 (“Persons covered”), every national of a Member State who is or has been “subject to the legislation of one or more Member States” falls within the scope of Reg. No. 883/2004. Thus, case law concerning the term “employment” under former Art. 1 Reg. No. 1408/71 cannot be applied, mutatis mutandis, to Art. 1 Reg. No. 883/2004. Former Court decisions are numerous and show how difficult it was, in certain circumstances, to define the personal scope of Reg. No. 1408/71 (see for instance Case C-121/92 (Zinnecker), EU:C:1993:840). In that case a German national who was a resident of Germany ran a business in Germany and in the Netherlands; the Court was asked to determine whether he was self-employed within the meaning of Art. 1 Reg. No. 1408/71 notwithstanding the fact that the German social security system does not cover self-employed persons; therefore the Court was required to decide whether the German or the Dutch legislation was applicable, but, as a preliminary matter, it was necessary to determine whether Reg. No. 1408/71 was relevant). Under Reg. No. 883/2004, such problems, described as vicious circles (Spiegel, p. 95), are reduced to persons who might not clearly correspond to the situation described by Art. 2 (Who finally are or are not “subject to the legislation of a Member State”?); this point is discussed below (see section III. concerning EU-coordination terms which are not defined in Art. 1). Art. 1 does not define the terms “employment” and “self-employment”. As 4 mentioned above (Art. 1 para. 2), the definitions provided in subparagraphs a) and b) refer to domestic law. Solely activities “treated as such for the purposes of the social security legislation” are taken into account. This excludes situations governed by laws other than social security law such as labour or tax law. The delimitation between different matters can be difficult because in some Member States social security issues are subject to rules which are not clearly defined as social security law. Although Art. 1 refers to national law, the term “social security” must be defined with regard to European coordination rules, especially Art. 3. Hence, whenever Member State law is adopted in order to cover at least one of the risks enumerated in Art. 3 such as sickness, maternity, invalidity or old age, it belongs to “social security legislation” within the meaning of Art. 1. Furthermore, it is important to check whether the national law is related to a working “activity”. The definition is broad though; it includes “any activity or equivalent situation treated as such” and thus may apply to commercial, educational, clerical, artistic or other types of human accomplishments. As long as such activities are treated as an employed or self-employed activity by Member State law, they fall within the scope of the definition by Art. 1. The Member Bettina Kahil-Wolff

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States are not allowed, however, to irrebutably presume that an activity is pursued on their territories; such presumptions could lead to situations wherein a person is subject to the legislation of more than one Member State (Case C-137/11 (Les Tartes de Chaumont - Gistoux SA), EU:C:2012:593, para 57: the location of an activity must be understood as referring to the place where “in practical terms, the person concerned carries out the actions with that activity”). If there is no professional activity at all, the conditions for the application of Art. 1 are not met. This is true for retired persons (also see Art. 11 (2) second phrase), people whose living expenses are financed by a private fortune or other individuals with no occupation. For sick or injured persons receiving cash benefits as a consequence of their activity, see Art. 11 (2), first phrase(they are “considered to be pursuing the said activity”). Pregnant women and young mothers are also concerned by this Article; they receive cash benefits according to Member State law implementing Directive 2010/41/EU. For unemployed persons refer to Art. 11 (3)(c). 5 The question whether an activity should be deemed employment or self-employment depends on the relevant Member State law. If a person is subject to the law of a Member State, according to the lex loci laboris principle for instance (Art. 11 third letter (a) Reg. No. 883/2004), the legislation of this Member State determines the characterization of the activity concerned. In some cases, it might be necessary to decide if an activity is economically relevant and thus can be qualified as self-employment or if it is beyond the scope of this term. A priest, for instance, who does not earn money but who receives benefits in kind may be engaged in a self-employment. In the Roosmalen Case, for example, the Court held that persons who pursue an occupation “in respect of which they receive income permitting them to meet all or some of their needs, even if that income is supplied by third parties benefiting from the services of a missionary priest” are deemed self-employed (Case C-300/84 (Roosmalen), EU:C:1986:402, para. 23). Both employed and self-employed persons benefit from the free movement of persons (Art. 45 and Art. 49 TFEU). Therefore it is quite logical that most of the coordination rules apply without distinction to each category: whether it concerns access to health care, payment of pensions or other issues, Reg. No. 883/2004 and Reg. No. 987/2009 do not distinguish between employed and selfemployed workers. The distinction between the two types of activities is however relevant when persons work in more than one Member State: if a person has a self-employed activity in both countries, his residence or his centre of interest determines the legislation applicable; if only one out of the two activities is a self-employed activity, it depends on the place where the employed activity is accomplished (see Art. 13 para. 2 and 3 Reg. No. 883/2004). Furthermore, Art. 65 a concerning unemployment benefits contains special provisions for persons who have had a self-employed activity.

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c) Insured person

The term “insured person” has a much narrower meaning than the terms de- 6 fined by subparagraphs a) and b). It is only relevant in relation to social security branches covered by Title III, Chapter 1 (sickness, maternity, equivalent paternity benefits) and Chapter 3 (death benefits). It was necessary to introduce this term because Reg. No. 883/2004 covers all nationals of a Member State who are or have been subject to the legislation of at least one Member State. Coordination rules concerning sickness and death benefits, however, require that the individual should be “insured” somewhere. In fact, he or she must be insured in a Member State in order to accede to those benefits, especially health care outside the competent Member State. According to Art. 19, for example, an “insured person (…) staying in a Member State other than the competent Member State shall be entitled to the benefits in kind which become necessary on medical grounds during (the) stay (…)”. The definition given by subpara. c) is new because Reg. No. 1408/71 contained no term equivalent to “insured person”. The former coordination rules referred to the expression “student (…) insured under a (…) social security scheme” because, since 1999, the chapters concerning sickness and maternity were applicable to students (Council Reg. No. 307/1999 of 8 February 1999, OJ L 38, 12.2.1999, p. 1-5); access to health care outside the competent Member State was also granted to other persons who did not exercise a professional activity but were “insured under the legislation of a Member State”. Art. 1(c) specifies that the term “insured” does not corresponding to the technical meaning used in the insurance sector where “insurance” generally supposes a mutual relation between an individual and an institution in accordance with which the former transfers a risk to the latter in exchange for payment. An insured person within the meaning of this definition is “(…) any person satisfying the conditions required under the legislation of the (competent) Member State to have the right to benefits”. This covers persons who are affiliated with a social security institution specialized in health care coverage (as in France or in Germany); but it also includes people living in a Member State with a National Health Service, where the access to health care is not based on a relationship between the individual and an insurance company (United Kingdom). Furthermore, the decisive condition to be fulfilled is that the individual must “have the right to benefits”, where “benefits” concern sickness, maternity, paternity and death benefits. The most current situations covered by the rule are related to health care because every Member State of the European Union has a system providing benefits in kind persons are sick. Those benefits naturally include typical medical care designed to heal injury or damage to health, caused by physiological or psychological harm. They also embrace benefits intended to improve the state of health and quality of life of persons reliant on care; such benefits are regarded as “sickness benefits” even if they are based on a national regulation, which supplements a sickness insurance system (Case C-210/06 (Government of the French Community and Walloon Government v. Flemish Government), Bettina Kahil-Wolff

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EU:C:2008:723). The Court decisions related to the term “sickness benefits” were not directly intended to explain Art. 1 ((c) but they are useful to understand the breadth of the term “benefits”. d) - e) Civil servant, special scheme for civil servants

For so long as they are subject to the social security legislation of a Member State, civil servants fall within the scope of Reg. No. 883/2004 and Reg. No. 987/2009 (see Art. 2 Reg. No. 883/2004; the former Reg. No. 1408/71 did not include civil servants until 1999; Council Reg. No. 1606/98 of 29 June 1998, OJ L 209, 25.7.1998, p. 1-15). Thus, Reg. No. 883/2004 contains several rules related to persons working for public authorities. Those rules mostly concern the legislation applicable. They are in line with international privileges and immunities, which are based on the principle that civil agents are not subject to the public regulations of the host State. Therefore, Reg. No. 883/2004 does not use the lexloci-laboris-rule for regular workers but, rather, the location of the “administration employing him/her”. Art. 11 (3) (b), for example, provides that a civil servant “shall be subject to the legislation of the Member State to which the administration employing him/her is subject” (also see Art. 13 (4)). Art. 1 gives no definition of the formulation “persons who are called up for service in the armed forces or for civilian service in a Member State” used by Art. 11 (3) (d); according to this rule soldiers are subject to the legislation of the Member State that drafted them. According to Art. 1 (d) the term “civil servant” refers to the legislation of the Member State to which the employing administration is subject. This will usually be the legislation of the State for which the agent is working but this is not always the case. The formulation also shows that the exercise of different kinds of activities can constitute civil service. Whether a policeman, a teacher, a notary, a doctor or other professional should be deemed a civil servant depends on the legislation of the competent Member State. In theory, it is not even necessary that the person has been hired under public law. A person with a private labour contract, for example, who is considered to be a civil servant by the relevant Member State corresponds to the definition given in Art. 1 (d). In our opinion, it is no longer necessary to refer to former case law concerning the term “civil servant” because Reg. No. 883/2004 and Reg. No. 987/2009 apply to every person subject to the social security legislation of at least one Member State; therefore a retired policeman who is covered by a national social security scheme may invoke Reg. No. 883/2004 (see Case C-194/96 (Kulzer), EU:C:1998:85). 8 The other provisions concerning civil servants clarify that coordination rules set up by Reg. No. 883/2004 also apply to persons covered by a “special scheme for civil servants” (see, for example, Art. 49 and Art. 60). Such special schemes exist in several Member States, e.g. in Germany where certain types of civil agents are protected by a system which is different from the general social security scheme applicable to employed persons. 7

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The term “civil servant” means persons who work for the administration of a 9 Member State. The staff of the European Union is covered by Reg. No. 259/68 of the Council of 29 February 1968 laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities (most recently amended by Reg. No. 1023/2013, OJ 2013 L 287/15). Contract staff of the EU, however, fall within the scope of Art. 15: they may opt “to be subject to the legislation of the Member State in which they are employed, to the legislation of the Member State to which they were last subject or to the legislation of the Member State whose nationals they are”. f) Frontier worker

Reg. No. 883/2004 and Reg. No. 987/2009 contain several special provisions 10 concerning frontier workers. These provisions mostly concern sickness and unemployment; some of these provisions are more or less favourable to frontier workers than the general rules. For this reason, it might be relevant to verify if a person who lives and works in two different Member States is qualified as a frontier worker, namely as a “person pursuing an activity as an employed or selfemployed person in a Member State and who resides in another Member State to which he or she returns as a rule daily or at least once a week”. In the field of social security issues covered by Reg. No. 883/2004, this definition is exclusively relevant to social trans-border situations; the meaning of the term “frontier worker” according to immigration law is not pertinent. Art. 1 (f) does not expressly say that the two Member States must have a common geographic border. Therefore, a person who works in London but lives in Munich could be considered as a frontier worker if the condition of returning daily or weekly is fulfilled. The Court decisions concerning the term are rare. In 1988, the Court held that a worker who, “in the course of his last employment, transfers his residence to another Member State and who, after that transfer, no longer returns to the State of employment in order to pursue an occupation there” cannot be regarded as a “frontier worker” (Case C-236/87 (Bergemann), EU:C:1988:443). According to Art. 18 (2), the Member States may decide that family members 11 of a frontier worker have access to health care in the competent Member State only if the relevant care becomes “necessary on medical grounds” (see Annex III concerning restriction of rights to benefits in kind for members of the family of a frontier worker and Art. 19 Reg. No. 883/2004 to which Art. 18 (2) refers); other family members in an equivalent situation (Art. 17 and Art. 18 (1): persons who live outside the competent Member State) have access to health care during a stay in this Member State without this condition. On the other hand, there is the general rule of Art. 22 concerning retired persons who cease to be entitled to sickness benefits in the Member State last competent; they remain entitled to sickness benefits in the Member State of residence (as is the case under Art. 17). If such a person corresponds to the definition provided by Art. 1 lit. f), he or she continues to receive benefits in kind in the Member State where he or she last Bettina Kahil-Wolff

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pursued his or her activity as a retired frontier worker if this is a continuation of treatment. In terms of unemployment benefits, Reg. No. 883/2004 refers frontier workers to the Member State of residence (Art. 65 (5)(a)); this Member State must pay the unemployment benefits, even in the case of a so-called “wholly unemployed atypical frontier worker” who has maintained personal and business links in the Member State of last employment (Case C-443/11 (Jeltes), EU:C: 2013:224: “the provisions of Article 65 of Regulation No 883/2004 are not to be interpreted in the light of the judgment of the Court of Justice of 12 June 1986 in Case 1/85 Miethe”). The term “wholly unemployed person” does not include persons who are still employed on a part-time basis (Case C-431/01 (Mertens), EU:C:2015:62, para. 30). g) - h) Refugee, stateless person 12

Refugees and stateless persons fall within the scope of Reg. No. 883/2004 and No. 987/2009 (Art. 2). The terms have the meanings assigned thereto by international law. According to Art. 1 of the Convention relating to the Status of Refugees, signed in Geneva on 28 July 1951, the term “refugee” applies to a person who, owing “to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality (…)”. To be considered as a refugee within the meaning of Art. 1 (g), it is not necessary that a person has obtained the status of asylum (the formulation used by Reg. No. 883/2004 is much older and broader than the terminology in Art. 78 TFEU concerning the EU common policy of asylum). A person, however, who has the status of asylum is generally considered to be a refugee within the meaning of Reg. No. 883/2004. What is important for the application of the European coordination rules is that the person concerned have moved from a Member State to another Member State and is now residing in a Member State (joined Cases C-95/99 et al. (Khalil), EU:C:2001:532). People may also be born without any nationality or lose their initial nationality (see e.g. C-135/08 (Rottmann), EU:C:2010:104). They are then qualified as “stateless persons”. A stateless person cannot be a citizen of the European Union because European citizenship requires that the individual concerned have the nationality of a Member State. Thanks to Art. 2, however, such an individual may invoke European coordination rules. i) Member of the family

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Family members are also included within the scope of Reg. No. 883/2004 and No. 987/2009, whether they are related to a national of a Member State or to a refugee or stateless person (Art. 2), and the EU coordination rules contain numerous provisions designed to regulate the social security coverage of these persons. Therefore, it is understandable that Art. 1 gives a definition of the term. The provision concerning “members of the family” is long because it must take into account different national legal systems. The most general definition is laid 60

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down in No. 1(i), because it simply refers to the legislation of the Member State under which benefits are provided. This legislation is relevant to the determination of whether spouses, children, step-children, parents, grand-parents etc. are part of the circle described as a family. Hence, Reg. No. 883/2004 differs from other EU legislation which does not refer to national law but contains its own specific definitions (see for example Art. 2(2) Directive 2004/38/EC on the right of citizens of the Union and their family members, OJ 2004 L 158/77; this provision enumerates the different persons who are considered to be family members, such as the spouse, the partner, the direct descendants and the dependent direct relatives). The relevant legislation can be, but is not necessarily, the legislation of the competent Member State. In the field of health care, for example, family members are entitled to benefits in the Member State of their residence (Art. 17) even if another Member State is competent to pay for those benefits (according to the lex loci laboris-rule). If, in such a case, the legislation of the Member State of residence considers unmarried partners to be family members, those partners are, for the purpose of Reg. No. 883/2004, to be recognized as family members; this follows from subpara. i). No. 1(ii), No. 2 and 3 concern more specific situations: some Members States may not distinguish between different family members, others may require a common household. For those cases, Art. 1(i) admits a family membership by means of a legal fiction (“shall be considered ….”). j) - k) Residence, stay

Several provisions of Reg. No. 883/2004 and Reg. No. 987/2009 contain the 14 words “residence” and “stay”. The residence can be relevant to determine the legislation applicable (see e.g. Art. 13); it may also help to designate the Member State which must provide health care or other benefits (Art. 17) and it is relevant for administrative procedures, especially the exchange of information and establishment of certain facts (e.g. according to Art. 82 medical examinations may, at the request of the competent institution, be carried out by the institution of the place of residence or stay). For the purpose of coordination a person cannot have simultaneously two habitual residences in two different Member States (Case C-589/10 (Wencel), EU:C:2013:303, para. 51). The term “residence” is based on an objective approach: it is the place “where a person habitually resides”. As a consequence, the location of residence must be examined by taking into account tangible clues such as the constant habitation of the individual in a certain place, the existence and actual use of a house or an apartment, the presence of family members etc. The definition does not expressly mention the subjective desire of the individual concerned, nor does it refer to national law. National law however may use other legal concepts to localize a subject of law, e.g. the concept of “domicile” which includes a subjective component. Conflicts between the European approach and those of a national law seem to be rare however because in most of the cases the permanent presence of a person at his/her Bettina Kahil-Wolff

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home indicates that he/she has the intention to be there. This might be different for prisoners who must be considered as residing in the Member State where they are imprisoned even if they do not have their domicile there. In such a case, the solution found by the concept of “residence” prevails and the person resides in the Member State in which he or she is imprisoned; this can be important, for instance, to determine if the prisoner is entitled to health care in this place. The concept of “stay” is also relevant for health care in case of illness and work accidents. It is somehow the opposite of “residence”: it means a “temporary” residence, thus a situation in which the residence is in another Member State. A person compelled to remain for medical reasons does not lose the rights granted by Art. 19 (Case C-255/13 (I.), EU:C:2014:1291, para. 53 and 59). l) Legislation

In most of the Member States, social security is mainly based on mandatory legal provisions. The affiliation with social security schemes and the payment of benefits is regulated by public law; this is also true for administrative procedures and access to Courts. It follows that the term “legislation” also has an important task within the coordination of social security systems. In Reg. No. 883/2004 and Reg. No. 987/2009 the word “legislation” appears almost everywhere: in rules concerning the personal scope (Art. 2 Reg. No. 883/2004), in provisions requiring equality of treatment (Art. 4 Reg. No. 883/2004) and other fundamental principles of coordination (see Art. 5-7), in Title II concerning the “Legislation applicable” etc. In order to guarantee the useful effect of Reg. No. 883/2004 and Reg. No. 987/2009, the word “legislation” must have a broad meaning. In addition to formal acts adopted by a parliament (“laws”), it also designates “regulations and other statutory provisions and all other implementing measures”. As mentioned above, the Court has interpreted the term “legislation” broadly. It has held that “a manifest concern of European coordination law is not excluded from the benefit of its provision schemes managed otherwise than by the State”, especially if such schemes cover a large proportion of the social security arrangements (CaseC-61/65 (Vaassen-Göbbels), EU:C:1966:39, para. 274-275). Thus the term may apply to rules drawn up in the form of private law but designed to be a substitute for public social security regulations (Case C-61/65 (VaassenGöbbels), EU:C:1966:39, para. 274). Contractual provisions in the form of collective agreements are excluded subject to the condition that they do not implement insurance obligations arising from the law; Member States may also make a declaration if they want collective agreements to be considered as social security legislation (Art. 1 (1) para. 2 Reg. No. 883/2004). 16 The term legislation is connected to the material scope of Reg. No. 883/2004 because it refers to Art. 3 (“Matters covered”). The definition provides that “legislation” means “laws, regulations and other statutory provisions and all other implementing measures relating to social security branches covered by Art. 3(1)”. According to Art. 3, Reg. No. 883/2004 applies “to all legislation” 15

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concerning the branches of social security enumerated (sickness, maternity, invalidity etc.) to which Reg. No. 883/2004 shall apply. Thus the concept of social security is decisive for the interpretation of the term legislation and vice versa. In practice, questions about the term “legislation” appear when an individual is covered by a scheme, which does not clearly belong to the general public social security of a Member State. In such situations the person or institution required to provide benefits may be tempted to claim that Reg. No. 883/2004 is not applicable. Therefore the Court has applied European coordination law to schemes providing sickness benefits to persons who are exempt from the general social security scheme but covered by a special scheme (Case C-61/65 (VaassenGöbbels), EU:C:1966:39, para. 275). The Court has also been called upon to decide the case of a person who was working in an associated territory of a Member State and who for this reason was subject to a specific legislation instead of the general legislation of this Member State; it held that a Colonial Decree governing sickness and invalidity insurance of colonial employees should be qualified as a “legislation” concerning social security (Case C-87/76 (Bozzone), EU:C:1977:60, para. 12). The term legislation “is remarkable for its breadth” and includes rules which apply to persons who pursue their activities (Case C-300/84 (Roosmalen), EU:C:1986:402, para. 31) outside the EU; in other words, the decisive criterion is whether a person is subject to a social security scheme of a Member State, but not whether the activity was accomplished in or outside the EU (also see Cases C-82/86 and C-103/86 (Laborero and Sabato), EU:C:1987:356). Furthermore, a national legislation, according to which sickness benefits are to be paid by the employer, can fall within the scope of the definition given by Art. 1 (Case C-45/90 (Paletta I), EU:C:1992:236). In the Grana-Novoa Case the Court had ruled that an international social security agreement concluded between a Member State and a third country does not come within the concept of legislation (…); the Member State, however, that concludes such an agreement must observe the principle of equal treatment and therefore is required to apply this agreement to citizens of other Member States (Case C-55/00 (Gottardo), EU:C:2002:16, para. 34). m) Competent authority

Reg. No. 883/2004 and Reg. No. 987/2009 mostly mention the Member 17 States as such, because they assume the responsibility of enforcing European law. This responsibility includes the obligation to use every national entity necessary for an effective application of EU laws. In the field of social security, public authorities have an important role in enforcement of the law, for example by adopting decisions or managing funds. They also have some obligations and tasks in the area of coordination, such as concluding agreements concerning the applicable law (Art. 16) or communicating to each other all information regarding measures taken to implement coordination rules (Art. 76 (1)). According to Art. 1(m), a competent authority is a ministerial entity. Thus it is in a higher posBettina Kahil-Wolff

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ition than the social security administration or independent institutions in charge of social security schemes. The competent authorities, for example, designate the so-called “liaison bodies” who must respond to practical requests for information and assistance (Art. 1 (8)(b) Reg. No. 987/2009). Usually, they also supervise all of the administrative agencies within a Member State and therefore may be authorized to establish binding Directives. Reg. No. 883/2004 treats administrative agencies in Art. 1 (p) and (q). The authorities of each Member State mentioned in subpara. m) are provided with an electronic identity (in the form of an identification code and electronic address, Art. 88 (2) Reg. No. 987/2009; for more details see commentary to Art. 78). n) - o) Administrative Commission, Implementing Regulation 18

These terms are not really defined by Art. 1. ( Art. 1 subpara. n) does nothing other than refer to Art. 71. This provision describes the structure of the Administrative Commission and the working methods to be observed; the tasks of the Administrative Commission are enumerated in Art. 72. The other organs created under Reg. No. 883/2004 are not mentioned in Art. 1, but a description can be found in Art. 73 (Technical Commission for Data Processing), in Art. 74 (Audit Board) and Art. 75 (Advisory Committee). The Administrative Commission is mentioned in several Articles of Reg. No. 883/2004 and No. 987/2009: According to Art. 19 (2), it must establish a list of sickness benefits which require a prior agreement between the person concerned and the institution providing the care; it establishes the list of substantial benefits in kind mentioned in Art. 33; another list to be established by the Administrative Commission concerns sickness benefits in cash (Art. 34). The reference to Art. 89makes sense in so far as this Article charges the European legislator with adopting an implementing Regulation. The necessary step was taken by adoption of Reg. No. 987/2004. p) - q) Institution, competent institution

19

Institutions are the counterpart to authorities mentioned under subpara. m). They are the administrative units, which are directly in charge of the implementation of social security schemes (in other words, the bodies responsible “for applying all parts of the legislation”, Art. 1 (p)). Social security institutions are usually in close contact with the individuals concerned, by according benefits and collecting contributions. Therefore, they are also required to participate in the coordination of social security. Several provisions of Reg. No. 883/2004 and Reg. No. 987/2009 refer to the generic term “institution”, such as Art. 7 concerning the waiving of residence rules: even if the beneficiary of benefits resides outside the Member State in which the providing “institution” is situated, benefits must be paid. In a very general way, EU coordination law sets up rules about how and when institutions must respond to practical requests for information and assistance; they must act “in accordance with the principle of good administration” (Art. 76 (4)). Another example is Art. 85 concerning the rights of “insti64

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tutions” against a third party liable for compensation for an injury. Reg. No. 883/2004 and Reg. No. 987/2009 also contain more specific terms designating an administrative body. Art. 19 (2) for example: this rule mentions the “institution providing the care” while a person stays outside the competent Member State and provides that certain types of health care require the prior agreement of the care-giving institution. In Art. 20 Reg. No. 987/2009, reference is made to the “relevant institution” which might be every institution involved in questions concerning the legislation applicable; according to this Article, the relevant institution must communicate with the competent institution. Whereas the term “relevant institution” is not defined, other concepts, such as “institution of residence” and “institution of the place of stay” (Art. 1 (r)) as well as “competent institution” are clearly defined. Art. 1 (q) even gives four alternative definitions: the competent institution is the institution with which the person concerned is insured, or the one from which the person concerned is entitled to receive benefits, or the one designated by the competent authority of the Member State concerned or the employer (in default thereof the body designated by the competent authority) (i-iv). The term is indeed important. In many cases, the competent institution must provide benefits, such as health care (Art. 18 (1)), pensions (Art. 50) or unemployment benefits (Art. 61). If it does not provide the benefits itself, the competent institution must reimburse the institution of another Member State (Art. 19 (1) and Art. 35). Therefore, it is not surprising that most of the provisions in Reg. No. 883/2004 and Reg. No. 987/2009 use the term “competent institution”. In the field of coordination, the concept is more important than the general term “institution” because one of the challenges in international cases is to designate the competent Member State (see subpara. s): “’competent Member State’ means the Member State in which the competent institution is situated”). The institutions of each Member State mentioned in subpara. q) are provided with an electronic identity (in the form of an identification code and an electronic address, Art. 88 (2) Reg. No. 987/2009); instead of lists attached to the Regulations (see e.g. Annex I to former Reg. No. 574/72), social security institutions of the Member States can be found in the “Institution Directory – EESSI Public Directory of European Social Security Institutions” published by the European Commission (Employment, social affairs & inclusion). r) Institution of the place of residence, institution of the place of stay

The terms “institution of residence” and “institution of the place of stay” are 20 relevant, mostly, in the fields of health care (Art. 17-20) and unemployment benefits (Art. 65). The Regulation makes a distinction between the “competent institution” (see the definition in Art. 1 lit. (q) on the one hand and of the institution of residence or stay on the other hand. According to Art. 19, for example, the institution of the place of stay provides health care, but it does this on behalf of the competent institution when such care becomes necessary on medical grounds during a stay outside the competent Member State. Medical examinaBettina Kahil-Wolff

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tions may be carried out, at the request of the competent institution, in another Member State, by the institution of the place of residence or stay (Art. 82). The institutions of each Member State mentioned in subpara. r) are provided with an electronic identity (in the form of an identification code and an electronic address, Art. 88 (2) Reg. No. 987/2009); instead of lists attached to the Regulations (see for instance Annex I to former Reg. No. 574/72), social security institutions of the Member States can be found in the “Institution Directory – EESSI Public Directory of European Social Security Institutions” elaborated by the European Commission (Employment, social affairs & and inclusion). s) Competent Member State 21

Although the term “competent Member State” does not appear very often in Reg. No. 883/2004, it has a key function for the coordination of social security schemes. Coordination means delimitation of responsibilities among different countries. Whenever an individual is concerned by the legislation of more than one country (for instance by working in one State while simultaneously working in another), the legislation applicable must be designated. By designating the legislation applicable (Art. 11-16), coordination rules simultaneously determine the Member State which is responsible for taking care of the person concerned. Art. 11-16 do not however expressly mention the “competent Member State” as such. The term appears in Title III, Chapter 1 of Reg. No. 883/2004, especially among the rules concerning residence and stay outside the “competent Member State” (Art. 17 and 19: the latter is required to pay for health care measure provided by the institutions of another Member State). The term is also used in provisions concerning unemployment benefits for persons who are seeking employment in another Member State (Art. 64 (2) Reg. No. 883/2004: the competent Member State pays the unemployment benefits). According to subpara. s), the “competent Member State” means the Member State in which the competent institution is situated; the latter is generally the institution by which the person concerned is insured (Art. 1 (q)). t) - v) Period of insurance, period of employment, period of residence

22

In social security, certain time periods may constitute an essential prerequisite for benefits. This is the case, typically, for old-age pensions and unemployment schemes. Therefore, Reg. No. 883/2004 prescribes the aggregation of such periods (Art. 6). The qualification as a relevant period (insurance, employment or residence period) depends on the national legislation under which they were completed. The Member States, however, are not completely free to define such periods. They must adopt all measures necessary to grant the right of freedom of movement. The fact, for example, that certain periods are not considered to be relevant periods and thus not taken into account, may penalize migrant workers whose pension depends on the aggregation of periods (Case C-347/00 (Barreira Pérez), EU:C:2002:560, para. 40-41). Furthermore, according to the principle of 66

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aggregation (Art. 6 Reg. No. 883/2004), periods communicated by other Member States shall be aggregated “without questioning their quality” (Decision No. H6 of 16 December 2010 adopted by the Administrative Commission, OJ 2010 C 45/5). va) - z) Benefits in kind, pension, pre-retirement, death grant, family benefit

The last subparagraphs of Art. 1 define some types of benefits, but they do 23 not by any means explain all the different benefits concerned by Reg. No. 883/2004. Benefits in kind, for example, are discussed as a general concept in para. va), cash benefits are not. There are only explanations concerning how to understand the terms “pension”, “pre-retirement benefits”, “death grant” and “family benefits”. On the contrary, cash benefits in the event of sickness or maternity (Art. 21), invalidity benefits (Art. 44) and unemployment benefits (Art. 61) are not defined by Art. 1. For special non-contributory cash benefits, Art. 70 Reg. No. 883/2004 must be used: this Article stipulates the conditions under which cash benefits are considered “special” and “non-contributory”. The definition of the term “benefits in kind” was added in 2009 (see Reg. No. 24 988/2009, OJ 2009 L 284/43). Such benefits have nonetheless always been subject to European coordination rules. They are governed by the provisions concerning mutual assistance in case of sickness and accident outside the competent Member State (Art. 17-20, Art. 37-38) and they give rise to reimbursement between institutions (Art. 35). Therefore, it is important to know that the term covers all benefits in kind “which are intended to supply, make available, pay directly or reimburse the cost of medical care and products and services ancillary to that care” (ii). This is quite a broad definition and it also applies to benefits in kind relating to accidents at work (ii). It includes substantial benefits like prostheses or major appliances (Art. 33) and costs of transport (Art. 37). Decision No. S5 of 2 October 2009 adopted by the Administrative Commission (OJ 2009 C 106/54) contains more information. In principle, it refers to Member State law (benefits in kind to be considered when calculating refunds are those regarded as benefits in kind “under the national legislation administrated by the institution which has provided the benefits” (I. 1 Decision No. S5); Decision No. S5 also contains details about care insurance benefits in kind and says which benefits are not to be regarded as costs for benefits in kind (I. 2. and 3. Decision No. S5). The definitions concerning the words “pension”, “pre-retirement benefits” 25 and “death grant” have not given rise to much case law. Concerning pensions, the Court has held that subsidies towards payment of contributions to sickness insurance constitute old-age pensions if they increase the value of the pension (Case C-73/99 (Movrin), EU:C:2000:369, para. 44); thus “payments in the form of reimbursements of contributions” may fall within the scope of the term “pensions” even if they help to finance a sickness insurance scheme (Case C-73/99 (Movrin), EU:C:2000:369, para. 43). Moreover, subpara. w) explains that this type of benefits includes not only periodically, e.g. monthly, paid allowances; Bettina Kahil-Wolff

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the term also designates capital allocated in lieu of a regular pension (“lumpsums”). Orphans’ pensions are “pensions”; Reg. No. 883/2004 does not contain a rule like the former Art. 78 a Reg. No. 1408/71, which assimilated orphans’ pensions to family benefits (also see Art. 69 (2): “Benefits paid in the form of pensions or supplements to pensions” are provided “in accordance with Chapter 5” concerning pensions). Pensions within the meaning of Art. 67 include benefits paid for bringing up a child after the death of a spouse (Case C-32/13 (Würker), EU:C:2014:107, para. 53). The term “pre-retirement benefits” was introduced by Reg. No. 883/2004. It covers retirement pensions following a period of unemployment (see, for instance, Case C-25/95 (Otte), EU:C:1996:295) which are neither old-age benefits nor unemployment benefits. The only rule concerning this type of benefits is Art. 66, which specifies that Art. 6 (aggregation of periods) is not applicable; pre-retirement benefits however must be paid in respect of other principles of coordination (equality of treatment, Art. 4 and waiving of residence rules, Art. 7). 26 The term “family benefit” defined in subpara. z) has been subject to many judgments of the Court. The definition in Art. 1 is broad: it covers “all benefits in kind or in cash intended to meet family expenses”. According to case law, family benefits are those “granted automatically to families meeting certain objective criteria, relating in particular to their size, income and capital resources” (Case C-78/91 (Hughes), EU:C:1992:331, para. 22). The fact that the grant of the benefit “is not subject to any contribution requirement does not affect its classification as a social security benefit” para. 21). Most of the Member States have social security systems which provide benefits for children, and those benefits fall fully within the scope of family benefits (see for instance Case C-41/84 (Pinna I), EU:C:1986:1 and Case C-266/95 (Merino Garcia), EU:C: 1997:292). The category of family benefits also includes other types, such as child-raising allowances (Case C-245/94 (Hoever and Zachow), EU:C: 1996:379), family allowances payable to the children of a deceased worker (Case C-32/76 (Saieva), EU:C:1976:136), family benefits based on tax law (Case C-321/93 (Imbernon Martinez), EU:C:1995:306) and tax rebates for children (Case C-177/12 (Lachheb), EU:C:2013:689). Annex I enumerates the benefits which do not fall within the scope of Reg. No. 883/2004 and Reg. No. 987/2009: maintenance payments do not constitute family benefits (contrary to Case C-85/99 (Offermanns), EU:C:2001:166); the same applies to special childbirth and adoption allowances; 15 respectively 17 Member States have mentioned maintenance payments (Annex I No. I) and/or special childbirth and adoption allowances (Annex I No. II). These benefits are therefore excluded from the scope of Reg. No. 883/2004. Some benefits given to families may constitute “special non-contributory benefits” rather than family benefits. In such a case, they fall within the scope of Art. 70 (see for example Case C-225/10 (Perez Garcia), EU:C:2011:678).

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III. Legal terms not expressly defined by Art. 1 Reg. No. 883/2004

As mentioned above, Art. 1 does not refer to the term “social security”. It 27 does not contain explanations concerning how to interpret the words “sickness benefits,” “old-age pensions” and other important concepts of social security. Therefore, the numerous judgments of the Court should be consulted. Most of these are still valid for the interpretation of those terms even if they were handed down in relation to Reg. No. 1408/71. According to well-settled case law, the question as to whether a benefit falls within the scope of the Regulation “essentially depends on the fundamental characteristic of the benefit, in particular its purpose and the conditions for its grant” (see, for instance, Case C-45/90 (Paletta), EU:C:1992:236, para. 16). A benefit “may be regarded as a social security benefit in so far as it is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a legally defined position and provided that it concerns one of the risks expressly listed” in Reg. No. 883/2004. The Court has also held that EU law does not establish a common system of social security and that it cannot be interpreted “in such way as to upset the system instituted by national legislation (Case C-356/89 (Newton), EU:C:1991:265, para. 18). The expression “subject to the legislation of one (…) Member State(…)” in Art. 2 is not defined either (cf. Art. 1 para. 3), although it is decisive for the personal scope of the Regulation. According to settled caselaw, however, it is sufficient that a person is covered by at least one branch of social security (Case C-302/02 (Effing), EU:C:2005:36, para. 32). This approach is still relevant even if it was initially focused on employed and self-employed persons. In the contrary, a person who works in a Member State without being subject to social security legislation, does not fulfil this condition (Case C-179/13 (Evans), EU:C:2015:12, para. 40: the British member of staff of the US-consular post based in the Netherlands is not subject to the legislation of a Member State). A few terms have been defined by special provisions of Reg. No. 883/2004. 28 Art. 70, for example, defines the term “special non-contributory cash benefits. Art. 11 (5), which was introduced by Reg. No. 465/2012 (OJ 2012 L 149/4), does not define the term “home basis” itself (this term is used to find the legislation applicable to activities as a flight crew or a cabin crew member) but it refers to a definition contained in Reg. No. 3922/91 on the harmonization of technical requirements and administrative procedures in the field of civil aviation (OJ 1991 L 373/4); it is “the location nominated by the operator to the crew member from where the crew member normally starts and ends a duty period”. Art. 75 Reg. No. 987/2009 contains a definition of the terms “applicant party” and “requested party”. This provision concerns the recovery of claims (Art. 84). It defines those parties as the national institution which make or receive a request in order to recover or refund contributions or unduly received benefits. Art. 1 Reg. No. 987/2009 contains explications about the terms “basic Regulation”, “implementing Regulation”, “access point”, “liaison body”, “document”, “Structured Bettina Kahil-Wolff

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Electronic Document”, “transmission by electronic means” and “Audit Board”. These terms concern more detailed matters than the concepts defined by Art. 1. It should nonetheless be borne in mind, however, that Reg. No. 987/2009 is a legal act within the meaning of Art. 288 (2) TFEU and thus equally as binding and directly applicable as Reg. No. 883/2004.

Article 2 Persons covered (1) This Regulation shall apply to nationals of a Member State, stateless persons and refugees residing in a Member State who are or have been subject to the legislation of one or more Member States, as well as to the members of their families and to their survivors. (2) It shall also apply to the survivors of persons who have been subject to the legislation of one or more Member States, irrespective of the nationality of such persons, where their survivors are nationals of a Member State or stateless persons or refugees residing in one of the Member States. Regulation (EU) No 1231/2010 of the European Parliament and of the Council of 24 November 2010 extending Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 to nationals of third countries who are not already covered by these Regulations solely on the ground of their nationality (OJ 2010 L344/1) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 79(2)(b) thereof, Having regard to the proposal from the European Commission, Having regard to the opinion of the European Economic and Social Committee,1 Acting in accordance with the ordinary legislative procedure,2 Whereas: (1) The European Parliament,3 the Council and the European Economic and Social Committee4 have called for the better integration of nationals of third countries who are legally resident in the territory of the Member States by giving them a set of uniform rights which match as closely as possible those enjoyed by citizens of the Union. (2) The Justice and Home Affairs Council of 1 December 2005 stressed that the Union must ensure fair treatment of third-country nationals residing legally in the territory of the Member States and that a more vigorous integration policy should be geared to granting them rights and obligations comparable to those of citizens of the Union. (3) Council Regulation (EC) No 859/20035 extended Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 on the coordination of Member States’ statutory social security schemes to the nationals of third countries who were not already covered by those Regulations solely on the ground of their nationality. (4) This Regulation respects the fundamental rights and observes the principles recognised, in particular, by the Charter of Fundamental Rights of the European Union, notably Article 34(2) thereof. (5) Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems6 replaces Regulation (EEC) No 1408/71. Regulation (EC) No

1 2

OJ 2008, C 151/ 50. Position of the European Parliament of 9 July 2008 (OJ 2009, C 294/ 259), position of the Council at first reading of 26 July 2010 (OJ 2010, C 253/ 1), and position of the European Parliament of 7 October 2010 (not yet published in the Official Journal). 3 European Parliament resolution of 27 October 1999 on the European Council meeting in Tampere (OJ 2000, C 154/ 63). 4 EESC opinion of 26 September 1991 on the status of migrant workers from third countries (OJ 1991, C 339/ 82). 5 OJ 2003, L 124/ 1. 6 OJ 2004, L 166/ 1.

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Article 2 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/20047 replaces Regulation (EEC) No 574/72. Regulations (EEC) No 1408/71 and (EEC) No 574/72 are to be repealed with effect from the date of application of Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009. (6) Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 significantly update and simplify the coordination rules for insured persons as well as social security institutions. For the latter, the updated co- ordination rules aim to accelerate and facilitate the processing of data on insured persons’ rights to benefits and to reduce the corresponding administrative costs. (7) Promoting a high level of social protection and raising the standard of living and the quality of life in the Member States are objectives of the Union. (8) In order to avoid a situation where employers and national social security bodies have to manage complex legal and administrative situations concerning only a limited group of persons, it is important to enjoy the full benefits of modernisation and simplification in the field of social security by making use of a single legal coordination instrument combining Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009. (9) It is therefore necessary to replace Regulation (EC) No 859/2003 with a legal instrument, the basic aim of which is to substitute Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 for Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 respectively. (10) The application of Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 to nationals of third countries who are not already covered by those Regulations solely on the ground of their nationality must not give them any entitlement to enter, to stay or to reside in a Member State or to have access to its labour market. Accordingly, the application of Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 should be without prejudice to the right of the Member States to refuse to grant, to withdraw or to refuse to renew a permit to enter, to stay, to reside or to work in the Member State concerned, in accordance with the law of the Union. (11) Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 should, by virtue of this Regulation, be applicable only in so far as the person concerned is already legally resident in the territory of a Member State. Legal residence should therefore be a prerequisite for the application of those Regulations. (12) Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 should not apply in a situation which is confined in all respects within a single Member State. This concerns, inter alia, the situation of a thirdcountry national who has links only with a third country and a single Member State. (13) The condition of residing legally in the territory of a Member State should not affect the rights deriving from the application of Regulation (EC) No 883/2004 concerning invalidity, old age or survivors’ pensions, on behalf of one or more Member States, for a third-country national who has previously fulfilled the conditions of this present Regulation, or the survivors of such third- country national, insofar as they derive their rights from a worker, when residing in a third country. (14) The continued right to unemployment benefit, as laid down in Article 64 of Regulation (EC) No 883/2004, is subject to the condition of registering as a job-seeker with the employment services of each Member State entered. Those provisions should only therefore apply to a third-country national provided that that individual has the right, where appropriate pursuant to his or her residence permit or long-term resident status, to register as a job-seeker with the employment services of the Member State entered and the right to work there legally. (15) This Regulation should be without prejudice to rights and obligations arising from international agreements with third countries to which the Union is a party and which confer benefits in terms of social security. (16) Since the objectives of this Regulation cannot be sufficiently achieved by the Member States on account of the cross-border situations involved and can therefore, by reason of the Union-wide scale of the proposed action, be better achieved at Union level, the Union may adopt measures in accordance with the principles of subsidiarity enshrined in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve those objectives. (17) In accordance with Article 3 of Protocol (No 21) on the position of United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice, annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union, Ireland has notified, by letter of 24 October 2007, its wish to take part in the adoption and application of this Regulation. (18) In accordance with Articles 1 and 2 of Protocol (No 21) on the position of United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice, annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union, and without prejudice to Article 4 of that Protocol, the United Kingdom is not taking part in the adoption of this Regulation and is not bound by it or subject to its application.

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Part 2: Regulation (EC) No 883/2004 (19) In accordance with Articles 1 and 2 of Protocol (No 22) on the position of Denmark, annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union, Denmark is not taking part in the adoption of this Regulation and is not bound by it or subject to its application, HAVE ADOPTED THIS REGULATION: Article 1 Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 shall apply to nationals of third countries who are not already covered by those Regulations solely on the ground of their nationality, as well as to members of their families and to their survivors, provided that they are legally resident in the territory of a Member State and are in a situation which is not confined in all respects within a single Member State. Article 2 Regulation (EC) No 859/2003 shall be repealed between the Member States that are bound by this Regulation. Article 3 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in Member States in accordance with the Treaties.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Three important elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Persons who are entitled in a direct way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Family members and survivors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 3 3 7 14

I. Spirit and Purpose

Art. 2 provides for the personal scope of Reg. No. 883/2004 and defines the conditions a person must fulfil to be covered by the Regulation. This rule has to be distinguished from the material scope (Art. 3), which defines the branches of social security which are covered by the Regulation. Therefore, before applying the Regulation, it has to be examined whether the person concerned is covered by the personal scope and the legislation at stake is covered by the material scope of the Regulation. Only if both conditions are met the rules on applicable legislation (Art. 11-16) and those on the coordination of the different benefits (Art. 17 et seq.) can be applied. 2 Different to Reg. No. 1408/71 the status of the person concerned (worker, self-employed, student etc.) does not any longer have relevance under the personal scope, but only the nationality (EU citizen) or the status as refugee or as stateless person. But these conditions have lost importance already under Reg. No. 1408/71 starting with 1 June 2003 as third country nationals were included in the personal scope by means of Reg. No. 895/2003 of 14 May 2003, OJ 2003 L 124/1. This Regulation continued to be applicable (and thus to apply Reg. No. 1408/71 for third country nationals) also after the entry into force of Reg. No. 883/2004 (Art. 90(1)(a)). Starting with 1 January 2011 the new Regulation for third country nationals entered into force and replaced Reg. No. 859/2003 (Reg. No. 1231/2010, OJ 2010 L 344/1). Although Reg. No. 883/2004 wanted to simplify the coordination it was not possible to include third country nationals already in Art. 2 as Art. 48 TFEU was declared by the CJEU as the wrong legal 1

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base for these persons and Art. 79(2)(b) TFEU had to be used which necessitated a separated Regulation (CJEU, Cases C-95/99, C-98/99 and C-180/99 (Khalil et al.), EU:C:2001:532). II. Commentary 1. Three important elements

The personal scope is based on three distinctive elements in relation to the person concerned: Nationality, family status and cross-border elements. Nationality: Due to Art. 2 one of the decisive elements is the nationality of the person concerned. If a person has the nationality of an EU Member State, of an EEA-State or of Switzerland (the two last ones only from the date the new Regulation became applicable in relation to these States, before Reg. No. 1408/71 remained applicable although for EU citizens already Reg. No. 883/2004 was applicable – Art. 90(1)(c)). In addition refugees or stateless persons are also covered directly by Reg. No. 883/2004 under the condition that they reside in a Member State. All other persons (third-country nationals) are only covered via Reg. No. 1231/2010. In this context it has to be observed that this Regulation does not apply in relation to Denmark (Recital 19) and to the United Kingdom (Recital 18). As the United Kingdom was not excluded from Reg. No. 859/2003 this Regulation continues to be applicable in relation to this Member State and thus Reg. No. 1408/71 has still to be applied for third country nationals in relation to the United Kingdom (Art. 90(1)(a)). In relation to Denmark third country nationals can only be covered through a bilateral agreement. The same applies for third country nationals in relation to the EEA-States and Switzerland (as Reg. No. 1231/2010 does not apply to these four States – CJEU, Case C-247/09 (Xhymshiti), EU:C:2010:698). Family status: In addition the family status is also relevant (if the person concerned does not already fall within the first group). This status is important for the rights and the legal position family members and survivors derive from another person. Also third country nationals can benefit directly from the Regulation as family member (because for this group nationality or the status as refugee or stateless person does not play a role). The status as family member is especially important for benefits in case of sickness (including long-term care benefits), widow and widower benefits as survivor pensions and survivors’ pensions under an accident at work or occupational disease scheme (Cornelissen, EJSS 2008, p. 351). In addition family members of course are also of relevance for family benefits or in other more detailed provisions, e.g. Art. 54(3) Reg. No. 987/2009 concerning the amount of unemployment benefits. Existence of a cross-border situation: Finally, the person concerned must be in a cross-border situation or his/her situation must contain cross-border elements. This element is not explicitly referred to in Reg. No. 883/2004 (in contrast see the explicit condition in relation to third country nationals in Art. 1 Reg. No. Bernhard Spiegel

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1231/2010) but could be deducted from the wording “who are or have been subject to the legislation of one or more Member States” in Art. 2(1) and (2). 2. Persons who are entitled in a direct way

Most important for the coverage is the nationality of a person (Cornelissen, EJSS 2008, p. 355 et seq.). This element has aspects concerning the fundamental status of the person concerned but also temporal aspects. All EU-citizens (nationals of a Member State), nationals of an EEA-State or Swiss nationals are directly covered. But, this coverage is only guaranteed for those periods during which this nationality is kept by the person concerned (CJEU, Case 10/78 (Belbouab), EU:C:1978:181). This limitation follows from the field of application of the fundamental principles of free movement (e.g. free movement of workers under Art. 45 TFEU), which itself is only applicable to EU-nationals. Through the relevant agreements EEA-nationals or Swiss nationals can also profit from comparable rights. As the coordination of social security schemes has to be understood as a transformation of these fundamental freedoms (CJEU, Case 44/65 (Singer), EU:C:1965:122) this reference to the actual status of the person concerned with regard to nationality makes sense (at least under Reg. No. 1408/71 which in principle was restricted to workers and self-employed persons). Therefore, it seems to be coherent that the CJEU denied the application of Reg. No. 1408/71 for a person who has lost the nationality of a State before the day of accession of this State to the EU (CJEU, Case C-105/89 (Buhari Haji), EU:C: 1990:402). Today the personal scope of Reg. No. 883/2004 has to be seen in the light of the European citizenship which can also be seen in the deletion of any reference to the activity status of the person concerned; today all persons who are or have been covered by a scheme of a Member State are covered by Reg. No. 883/2004. Of course this new personal scope also brought a considerable simplification (Yorens/Van Overmeiren, p. 113 et seq.). Anyhow, due to the inclusion also of all third-country nationals (see para. 4) in nearly all cross-border situations this restriction of Regulation to the nationals has lost a lot of its significance. 8 Having the nationality of a Member State is not sufficient, the person concerned must also have been subject to the legislation of one or more Member States. This can take various forms like e.g. being insured in an insurance-based Bismarckian social security scheme or being a resident in a residence-based scheme. In case of an insurance-based scheme actual insurance seems not to be necessary, it is sufficient that an obligation to be insured is provided under the applicable national law, which leads to the coverage by the Regulation also of persons, who have not been insured e.g. due to the neglect of their employer (CJEU, Case 39/76 (Mouthaan), EU:C:1976:181). Also a voluntary insurance must be sufficient to open the personal field of application of the Regulation. 9 An important additional condition is that the person concerned must be in a cross-border situation; a person with purely internal situations which do not 7

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reach beyond the borders of the Member State concerned does not fall under the personal scope of Reg. No. 883/2004 (e.g. CJEU, Case C-212/06 (Gouvernement de la Communauté Française), EU:C:2008:178, or in relation to refugees and stateless persons Case C-95/99, C-98/99 and C-180/99 (Khalil et al.), EU:C: 2001:532). This has been made very explicit by the CJEU in Case C-153/91 (Petit), EU:C:1992:354, where the application of the principle enshrined in Art. 76(7) that for applications and claims all official languages of the EU have to be treated equally does not apply in case of a language dispute inside Belgium of a person who is a Belgian national. Of course, the cross-border situation can have various appearances: it can be e.g. nationality of another Member State, residence outside the competent Member State, the need for medical treatment during a short stay abroad, a career in more than one Member State when claiming a pension (even if in between these careers in two Member States a longer period has been spent outside the EU) or the situation not of the person concerned but of his/her family members who e.g. reside in another Member State (CJEU, Case C-194/96 (Kulzer), EU:C:1998:85). The inclusion also of third-country nationals, first with Reg. No. 859/2003 10 and now with Reg. No. 1231/2010 was a necessity due to the fact that more and more migrants from outside the EU came to work here. While the situation of third-country nationals entering the Union without cross-border elements had to be dealt with under the various residence Directives for third country-nationals (as an example Directive 2011/98/EU of 13 December 2011 on a single application procedure for a single permit for third-country nationals to reside and work in the territory of a Member State and a common set of rights for third-country workers legally residing in a Member State, OJ 2011, L 343/1, could be mentioned) these Regulations cover the situation of those third-country nationals who also have a cross-border situation between Member States. The freedom to provide services under Art. 56 TFEU already shows that a coordination of social security rights of third-country nationals is necessary to avoid disadvantages for cross-border service providers. As the CJEU has ruled it is contrary to this freedom to provide services if this service provider established in one Member State needs work permits for his/her third-country employees whom he wants to send to another Member State to provide his/her services (Case C-43/93 (Van der Elst), EU:C:1994:310, and Case C-113/89 (Rush Portuguesa), EU:C:1990:142). From these rulings it can be deducted that e.g. the obligation to pay in two Member States social security contributions or the lack of entitlements to benefits in the Member State of work (e.g. health care treatment) would also be a hindrance to provide services as this would result in additional costs for a crossborder service provider compared to the service providers established in the Member State where the service is provided. Reg. No. 883/2004 applicable via Reg. No. 1231/2010 avoids these disadvantages as e.g. the posting provision under Art. 12 can be applied and thus the contributions have to be paid only in the posting Member State and also health care benefits can be claimed under Art. 19 Bernhard Spiegel

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which e.g. makes an additional private insurance for these posted employees superfluous. 11 The application of Reg. No. 883/2004 in relation to third-country nationals via Reg. No. 1231/2010 depends on two criteria (in addition to the criteria applicable also to EU citizens under Reg. No. 1231/2010): the person concerned must be legally resident in a Member State and the situation of the person concerned must not be confined in all respects within a single Member State (in principle this latter condition is not a real innovation as in relation to EU nationals the Regulation also only applies if cross-border elements are given – see para. 9). To document the legality of the stay (residence) of a third-country national a national certificate could be used (e.g. which is provided in compliance with one of the EU Directives on the residence of third-country nationals – see para. 8). An issue which is not clear is if this condition of a legal “residence” has to be understood in the same way as the “residence” defined in Art. 1(j), thus excluding third-country nationals who are only temporarily (in the sense of a “stay” as defined in Art. 1(k)) in a Member State. Of course, third-country nationals who fall already under Reg. No. 883/2004 (as family members of an EU national, refugees or stateless persons – if the latter can be regarded as covered by the notion “third-country national”) do not need Reg. No. 1231/2010 and thus are excluded from its field of application. 12 Recital 13 of Reg. No. 1231/2010 clarifies that the condition of a legal residence in a Member State does not exclude the application of Reg. No. 883/2004 in cases in which third-country nationals had e.g. worked in more than one Member State in the past but reside already in a third country when claiming a pension. That means that a pension claimed while residing already in a third country also starts the examination of entitlement and the calculation of pensions under Title III Chapters 4 and 5. But, this does not automatically give entitlement also to benefits during residence outside the EU. This question is still subject to national law which of course has to be in compliance with EU law (e.g. Art. 12 (4) of the single-permit Directive – see para. 10), as the case may be supplemented by bilateral agreements which provide an “export-rule”. 13 Bilateral agreements between a Member State and a third country cannot achieve the same results as Reg. No. 1231/2010. Such agreements usually only try to solve bilateral problems with the third country concerned but cannot tackle multilateral situations like e.g. cross-border situations inside the EU. But, of course, such bilateral agreements have not become superfluous due to Reg. No. 1231/2010 as the latter only deals with coordination inside the EU while bilateral agreements coordinate the systems of the third country with those of a Member State. 3. Family members and survivors 14

A difference has to be made between the family members and the survivors. While for the first the nationality of the person opening the rights is relevant 76

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(this person must be an EU national, refugee or stateless person) and all persons irrespective of their nationality are covered for the latter in addition to this group, also the survivors of a third-country national are covered if these survivors have the nationality of an EU or EEA Member State or of Switzerland (or if they are refugees or stateless persons). These differences between the different groups of family members and survivors have also lost a lot of their significance as all third-country nationals are now also included via Reg. No. 1231/2010. In the beginning of the rulings of the CJEU there was a clear-cut limitation of 15 the rights of family members and survivors which had to be derived rights (CJEU, Cases C-243/91 (Taghavi), EU:C:1992:306, or C-94/84 (Deak), EU:C: 1985:264). Therefore, a handicapped child of a worker could not claim benefits for disabled persons which could under the relevant national legislation only be claimed as independent rights and had nothing to do with the situation of the worker (Taghavi). In the later rulings this borderline between independent and derived rights was abolished. As a new trend-setter the ruling of the CJEU in Case C-308/93 (Cabanis-Issarte), EU:C:1996:169, has to be cited. In this case the CJEU opened the personal scope of the Regulation also for a family member of a deceased worker concerning a voluntary insurance as an independent right. This new trend has been confirmed on various occasions, e.g. concerning family benefits like child-care allowances which are granted to the person taking care of a child as an independent right and not as a derived right (CJEU, Case C-245/94 and C-312/94 (Hoever and Zachow), EU:C:1996:379). The exclusion of family members from the application of the Regulation with 16 regard to independent rights is therefore restricted to those provisions which explicitly refer to the situation of an active person as e.g. the provisions concerning unemployment benefits (CJEU, Cases C-40/76 (Kermaschek), EU:C:1976:157, and C-189/00 (Ruhr), EU:C:2001:583). Of course especially for these provisions (e.g. unemployment benefits) Reg. No. 1231/2010 brought important improvements for third-country nationals so that these limitations in reality also lost a lot of their significance.

Article 3 Material Scope (1) This Regulation shall apply to all legislation concerning the following branches of social security: a) sickness benefits; b) maternity and equivalent paternity benefits; c) invalidity benefits; d) old-age benefits; e) survivors’ benefits; f) benefits in respect of accidents at work and occupational diseases; g) death grants; h) unemployment benefits;

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pre-retirement benefits; family benefits.

(2) Unless otherwise provided for in Annex XI, this Regulation shall apply to general and special social security schemes, whether contributory or non-contributory, and to schemes relating to the obligations of an employer or shipowner. (3) This Regulation shall also apply to the special non-contributory cash benefits covered by Article 70. (4) The provisions of Title III of this Regulation shall not, however, affect the legislative provisions of any Member State concerning a shipowner's obligations. (5) This Regulation shall not apply to a) social and medical assistance or b) benefits in relation to which a Member State assumes the liability for damages to persons and provides for compensation, such as those for victims of war and military action or their consequences; victims of crime, assassination or terrorist acts; victims of damage occasioned by agents of the Member State in the course of their duties; or victims who have suffered a disadvantage for political or religious reasons or for reasons of descent. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Historical development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. The branches of social security (para. 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) The term social security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Scope of the different benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) Sickness benefits, maternity and equivalent paternity benefits: (a) and (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . bb) Invalidity benefits: (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cc) Old-age benefits: (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . dd) Survivors’ benefits: (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ee) Benefits in respect of accidents at work and occupational diseases: (f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ff) Death grants: (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . gg) Unemployment benefits: (h). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . hh) Pre-retirement benefits: (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii) Family benefits: (j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Declarations pursuant to Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Comprehensive integration of national schemes (para. 2) . . . . . . . . . . . 3. Special non-contributory cash benefits (para. 3) . . . . . . . . . . . . . . . . . . . . . 4. Ship-owners obligations (para. 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Exclusions (para. 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Exclusion of social and medical assistance . . . . . . . . . . . . . . . . . . . . . . . aa) Doctrinal background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . bb) Distinction to non-contributory benefits . . . . . . . . . . . . . . . . . . . . . . cc) Revised formulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Compensation schemes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Benefits for the victims or war and military action or their consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Special schemes for civil servants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) The problems involved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Necessity of including civil servants in the coordination. . . . . . . . . c) Inclusion of civil servants by means of Reg. No. 1606/98 of the Council dated 29 June 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) The provisions of Reg. No. 883/2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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1 1 2 4 4 5 7 8 8 12 16 18 19 20 21 25 27 29 30 31 32 33 33 33 38 39 40 41 44 44 45 46 48

Article 3

I. Spirit and Purpose 1. Historical development

The predecessors of Art. 3 were Art. 2 Reg. No. 3 from 1958 and Art. 4 Reg. 1 No. 1408/71. In order to take full account of the fundamental right of freedom of movement these regulations provided for an extremely wide material scope. ILO Convention No. 102 from 1952 concerning Minimum Standards of Social Security served as a model. This covered general and special contributory and noncontributory schemes, including schemes constituting obligations of an employer. Art. 3 complies to a large extent with the structure and contents of the predecessor provision of Art. 4 Reg. No. 1408/71. The key amendment compared with former legislation is the separate treatment of the non-contributory cash benefits hitherto included in Art. 4(2 a) Reg. No. 1408/71 . For this a special provision was created in Art. 70. The new paragraph 5 includes a more precise rendition of the conditions for exclusion vis-à-vis the earlier Art. 4(4) Reg. No.1408/71. 2. Principles

Pursuant to Art. 48 TFEU, which is intended to protect the legal position of 2 workers with respect to social security against disadvantages arising from affiliation in different national social security systems when moving from one Member State to another, the material scope of Reg. No. 883/2004 is to be interpreted in the widest sense, the reason why not only the so-called classic social security systems are included, but also those that are – without being state administered – part of the national system of social security (CJEU, Case 61/65 (VaasenGöbbels), EU:C:1966:583). The extensive orientation of this rule, which also includes social security systems not administered by state insurers, can therefore be attributed to the fact that the goal of free movement pursued by the TFEU is intended as the basis and orientation, as well as the limitation of the teleological interpretation of Reg. No. 883/2004 and Reg. No. 987/2009. Reg. No. 883/2004 applies pursuant to Art. 3 to all legislation relating to the 3 branches of social security that provide for benefits in the case of sickness and maternity, invalidity, old-age, accidents at work and occupational diseases, unemployment, death (benefits for survivors and death grants) as well as family benefits. Pre-retirement benefits have been added. The fact that Art. 3(2) lays down the material scope independently of whether contributory or non-contributory systems are concerned or such relating to the obligations of an employer, is a clear indication that Reg. No. 883/2004 aims at a coordination of the social security systems of the Member States in the broadest sense (cf. in this respect CJEU, Case 104/76 (Jansen), EU:C:1977:72). Pursuant to Art. 9 the Member States are obliged to submit declarations indicating the legislations and schemes referred to in Art. 3. For the legal significance of these declarations see Art. 9 para. 7 et seq. This list of the branches of social security in Art. 3 is exhaustive. Any branch of social security not listed in Art. 3 cannot qualify as such, even if Maximilian Fuchs

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it grants the beneficiary a legal right to a benefit (CJEU, Case C-25/95 (Otte), EU:C:1996:295; Case C-160/96 (Molenaar), EU:C:1998:84). II. Commentary 1. The branches of social security (para. 1) 4

Art. 3(1) encompasses all rules pertaining to benefits in the case of sickness and maternity and paternity, invalidity, old-age and survivors, accidents at work and occupational diseases, death grants, unemployment, pre-retirement as well as family benefits. The regulation does not define the nature of a benefit of social security pursuant to Reg. No. 883/2004 (EC). In view of the different national provisions and their resulting different social benefits systems such a definition would appear neither possible nor expedient (cf. in this respect van Raepenbusch, Soziales Europa 1992, leaflet 3, p. 18-30). a) Legislation

5

Legislation is defined in Art. 1(l) subpara. 1 as, in respect to each Member State, laws, regulations and other statutory provisions and all other implementing measures relating to the social security branches covered by Art. 3(1). It follows from Art. 1(l) subpara. 2, that contractual provisions do not fall under the term legislation. The reason for omitting contractual provisions is that their coordination would entail great problems due to an absence of legal regulation. However, an exception to this principle applies if the contractual agreement serves to implement an insurance obligation arising from the laws or regulations within the meaning of subpara. 1 or if the contractual agreement is the subject of a public authority decision declaring it obligatory or extending its scope. The formal condition in this case requires that the Member State concerned makes a declaration to that effect, notified to the President of the European Parliament and the President of the Council of the EU, such declaration to be published in the Official Journal of the EU. An example of such a procedure under existing law is the declaration of the French government stating that collective agreements concluded on the basis of the Labour Code and pertaining to unemployment benefits should fall within the material scope of Reg. No. 1408/71 (cf. Pennings, Introduction to European Social Security Law, 4th ed. 2003, p. 60). Furthermore, without the French declaration it would have been impossible under European law to answer the key question in the Case Grisvard (CJEU, Case C-201/91, EU:C:1992:368) concerning among other things unemployment benefits for unemployed frontier workers, because the French collective agreements would not have constituted legislation that would fall within the material scope of the Regulation. See also the decision of the CJEU in the Case C-57/90 (Commission/France), EU:C:1992:10 relating primarily to a French infringement of Art. 13(1) and (33) Reg. No. 1408/71 (France deducted health insurance contributions from supplementary old-age pensions and early retirement pensions re80

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ceived by persons resident in a Member State other than France and whose cover against sickness and maternity is not charged to a French scheme). The CJEU made it clear that national social security schemes introduced under agreements concluded by the competent authorities with trade or inter-trade bodies or under collective agreements concluded between both sides of industry which have not been the subject of a declaration mentioned in Art. 1(l) do not constitute legislation within the meaning of the provision and therefore any benefits which they provide do not fall within the matters covered by Reg. No. 883/2004 (likewise CJEU, Case C-253/90 (Commission/Belgium), EU:C:1992:58). The German and Austrian special systems for self-employed persons were al- 6 ready integrated into the material scope of Reg. No. 1408/71 through Reg. No. 647/2005 from 13.4.2005 (OJ L117/1) (in anticipation of Reg. No. 883/2004). Where Germany is concerned this involves the 89 compulsory pension institutions set up under the law of the Länder for the self-employed who are members of professional chambers (doctors, pharmacists, architects, notaries, lawyers, tax consultants or tax agents, veterinary surgeons, auditors and certified accountants, dentists as well as psychological psychotherapists and engineers). In the case of Austria these constitute the pension schemes and similar institutions for doctors, veterinary surgeons, lawyers, notaries, civil engineers. Reg. No. 883/2004 now encompasses all special professional systems in Europe within its material scope; so exclusion as was envisioned in the former Annex II Part 1 Reg. No. 1408/71 no longer exists (for the background to this legal development cf. Hartmann/Horn, Versorgungswerke (berufsständische), in: Rieger/Dahm/ Steinhilper, Heidelberger Kommentar Arztrecht Krankenhausrecht Medizinrecht, 2012, 5388 para. 124). b) The term social security

There is some doubt as to how the term social security in the sense of 7 Art. 3(1) is to be interpreted. Whether a benefit is classed as a benefit of social security by the national legislation bears no relevance here (CJEU, Case C-78/91 (Hughes), EU:C.1992:331; Case C-245/94 and C-312/94 (Hoever and Zachow), EU:C:1996:379). A benefit may be regarded as a social security benefit firstly if it is granted without any individual and discretionary assessment of personal needs on the basis of a legally defined position and secondly if it is based on one of the risks expressly listed in Art. 3(1) (CJEU, Case 249/83 (Hoeckx), EU:C: 1985:139 para. 11; Case C-66/92 (Acciardi), EU:C:1993:341 para. 14; Case C-160/96 (Molenaar), EU:C:1998:84 para. 20; Case C-286/03 (Hosse), EU:C: 2006:125 para. 37; Case C-396/05 (Habelt), EU:C:2007:810 para. 63). With regard to determining the precise nature of the benefit it follows from the Court’s settled case law that the concepts to which that law refers should not vary according to the particular features of each system of national legislation but rest upon objective criteria defined in a context specific to EU legislation (cf. most recently CJEU, Case C-503/09 (Stewart), EU:C:2011:500 para. 35). Where the Maximilian Fuchs

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determination of the precise nature of the benefit in question is concerned the CJEU requires in its consistently settled case law that in order to be classified as social security benefits, benefits must be regarded, irrespective of the characteristics peculiar to different national legal systems, as being of the same kind when their purpose and object as well as the basis on which they are calculated and the conditions for granting them are identical. On the other hand, characteristics which are purely formal must not be considered as a relevant criteria for the classification of the benefits (CJEU, Case 171/82 (Valentini), EU:C: 1983:189 para. 13; Case C-406/04 (De Cuyper), EU:C:2006:491 para. 25; Case C-228/07 (Petersen), EU:C:2008:494 para. 21). In compliance with the objectives of Art. 48 TFEU, to ensure as best as possible the freedom of movement of migrant workers within the territory of every Member State of the Community, Art. 3 encompasses the social security schemes in their entirety, provided that these are based on the catalogue of social risks laid down in para. 1 (CJEU, Case 104/76 (Jansen), EU:C:1977:72). It is therefore to be assumed that not only the special rules relating to the various branches of social security referred to in Art. 3(1) which may fall within the scope of the Regulation, but also legislation which, like the Dutch CwSV (law concerning the coordination of the legal requirements of social security with legislation on the taxation of wages and salaries), is designed, on the one hand, to ensure coordination amongst a number of those branches, in particular by establishing a single contribution, and, on the other hand, to coordinate those various branches of social security with the legislation on the taxation of wages and salaries by defining common concepts and establishing identical rules for collection (CJEU, Case C-327/92 (Rheinhold and Mahla NV), EU:C:1995:144). Para. 2 clearly indicates that the classification of systems of social security within the meaning of para. 1 does not depend upon the manner in which the benefit is financed or the existence or non-existence of compulsory contributions, because non-contributory benefits also fall within the scope of the Regulation (CJEU, Case 379-381/85 and 93/86 (Giletti), EU:C: 1987:98). Within the meaning of the fundamental objective of Art. 48 TFEU preventative protection also falls under social security in compliance with Art. 3 (CJEU, Case 14/72 (Heinze), EU:C:1972:98; Case 818/79 (AOK Mittelfranken), EU:C:1980:216). c) Scope of the different benefits aa) Sickness benefits, maternity and equivalent paternity benefits: (a) and (b) 8

The term sickness benefits and maternity benefits (see Art. 17-35 for their coordination) is to be interpreted not according to the respective criteria of any national legislation, but in accordance with Community Law, because in order to have a purpose-related effect it must not fail due to the different interpretations of the individual Members States with regard to their respective branches of insurance and administrations. A broad interpretation of the term is to be assumed

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if the risks in question are to be adequately ensured. A fundamental characteristic of a sickness benefit is that it covers the risk connected to a morbid condition involving temporary suspension of the concerned person’s activities (CJEU, Case C-503/09 (Stewart), EU:C:2011:500 para. 37). It is this element of temporary incapacity that distinguishes such benefits from invalidity benefits which are linked to the permanency of the incapability for work (see below para. 12 et seq.). The CJEU has assigned the German care insurance scheme to sickness bene- 9 fits (CJEU, Case C-160/96 (Molenaar), EU:C:1998:84; Case C-208/07 (Chamier-Glisczinski), EU:C:2009:455 para. 40). Not only the individual benefits provided for by the care insurance and the organisation of their contents were decisive for the CJEU in its assignment, but also the fact that they are essentially intended to supplement the health insurance benefits to which they are, moreover, linked at the organisational level, in order to improve the state of health and the quality of life of persons reliant on care. The CJEU also classified the care allowance provided for by the Bundespflegegeldgesetz (Austrian Federal Law on Care Allowance) as a sickness benefit (CJEU, Case C-215/99 (Jauch), EU:C:2001:139). In fact under Austrian law care allowance would perhaps more logically fall under the pension and accident insurance as care allowance is only granted to the recipients of a pension who have suffered an accident at work or an occupational disease or recipients of a pension under the Allgemeines Sozialversicherungsgesetz (General Law on social security) and is paid by the statutory pension and accident insurance institutions. Despite allowance care being financed by means of the Austrian Government releasing the funds needed for that expenditure at the budgetary level by reducing the federal contribution to pension insurance and the compulsory pension and accident insurance institutions being subsequently reimbursed by the federal budget for their expenditure in this respect, the CJEU considered Austrian care allowance as a contributory benefit. Because the reduction of the financial contributions of the pension insurance to the health insurance institutions that went hand in hand with the introduction of care allowance, with the intended purpose of easing the financing of the newly created care allowance, in turn gave rise to an increase in the health insurance contributions. In other words, the care allowance is financed indirectly by the health insurance contributions. This enabled the CJEU to classify care allowance as a contributory benefit. See Art. 70 para. 16 below for the question of whether the fact that the Austrian Government had listed care allowance as a special non-contributory cash benefit in Annex X pursuant to Art. 70 constituted an obstacle to its classification as a contributory benefit pursuant to Art. 3(1) (a). In another proceeding, the joined Cases C-502/01 and C-31/02 (Gaumain-Cerri/ Barth), a ruling from the CJEU was requested as to whether the contributions payable according to German legislation to the statutory pension insurance scheme by care insurance institutions on behalf of carers not acting in the course of employment (§§ 44 of SGB XI, in conjunction with §§ 3 (1)(1 a), 166(2) of Maximilian Fuchs

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SGB VI) constitute “sickness benefits” within the meaning of Art. 3(1)(a). The Court affirmed that this was indeed the case (C-502/01 and C-31/02 (GaumainCerri and Barth), EU:C:2004:413). It considered pension insurance contributions as being ancillary to the actual care allowance and therefore emphasised its qualification as a cash benefit of health insurance (para. 27 of the judgement). In a later ruling the CJEU clearly demonstrated that it adhered to the assignment of benefits paid to those reliant on care to sickness benefits (CJEU, Case C-388/09 (da Silva Martins), EU:C:2011:439 with critical comments Osterholz/Mettig). Care allowances provided for in regional regulations also fall within the scope of Art. 3(1)(a) (CJEU, Case C-286/03 (Hosse), EU:C:2006:125 – concerning care allowance in compliance with the Salzburg Pflegegeldgesetz (Law on Care); Case C-212/06 (Gouvernement wallon), EU:C:2008:178 – concerning care allowances of the Flemish Parliament). German Federal State benefits for the blind, deaf and disabled are also considered sick benefits (CJEU, Case C-206/10 (Commission/Germany), EU:C:2011:283). 10 Sickness benefits may also include benefits that are not assigned to health insurance on a national level but to pension insurance (CJEU, Case 14/72 (Heinze), EU:C:1972:98). The CJEU also classified medical rehabilitation benefits and the TBC aid of the German pension insurance under sickness benefits in the Case Jordens-Vosters (CJEU, Case 69/79, EU:C:1980:7) (affirmed Otting, in: Hauck/Noftz, Art. 3 para. 19). The words “sickness and maternity benefits” must therefore be interpreted as also including in principle benefits under legislation concerning invalidity which are in the nature of medical or surgical care. This classification of benefits is consistent with the latest case law of the CJEU concerning the distinction between sickness and invalidity. In its judgement in the Case Stewart (CJEU, Case C-503/09, EU:C:2011:500 para. 37 et seq.) the Court considered the temporary or rather permanent cessation of the capacity for work as a decisive aspect. The first case constitutes a sickness benefit and the second an invalidity benefit. As medical benefits and rehabilitation benefits are intended for the removal or at least improvement of the incapacity for work, the classification as sickness benefit is appropriate. Another example is the employer’s obligation to continue paying wages in the case of sickness in compliance with the German Law on the continuation of salary and the employer’s contribution to maternity pay in compliance with § 14 MuSchG (CJEU, Case C-45/90 (Paletta), EU:C:1992:236), because the purpose and object of such is to cover risks of sickness or maternity. Measures that serve the prevention of illness and disease control are also included here (CJEU, Case 14/72 (Heinze), EU:C: 1972:98). 11 Not until Reg. No. 883/2004 was the equal treatment of maternity benefits and paternity benefits included within the material scope. This insertion originates with a proposal of the EP and serves to assimilate the principle of equal treatment (Jorens/Overmeiren, Allgemeine Prinzipien der Koordinierung in VO 883/2004, in: Eichenhofer (ed.), 50 Jahre nach ihrem Beginn, 2009, p. 105, 118).

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Due to the fact that for the father these benefits differ from parental benefits and can strictly speaking be assimilated to maternity benefits in that they are provided during the first months of a newborn child’s life, the Regulation deemed it appropriate that maternity and equivalent paternity benefits be regulated jointly (cf. Recital No. 19 in the preamble). bb) Invalidity benefits: (c)

Coordination of invalidity benefits is effected via the provisions of Art. 44-49. 12 The term invalidity is not defined within the scope of the Regulation. Qualification does not depend on national legislation, but solely on qualification under Community law, because in the different Member States invalidity is sometimes treated as extended sickness and sometimes as a risk of age (cf. Reinhard/ Kruse/von Maydell (eds.), Invaliditätssicherung im Rechtsvergleich, 1998). In the Case Heinze (CJEU, Case 14/72, EU:C:1972:98) the CJEU stated that invalidity is closely linked with the question of capacity for work. Following the linguistic usage of German pension insurance law invalidity can be defined as the risk of a reduction or loss of earning capacity, which as a rule leads to a reduction in earnings (cf. also Case 15/72 (Land Niedersachsen), EU:C:1972:99 and 16/72 (AOK Hamburg), EU:C:1972:100). In as far as the distinction to sickness benefits is concerned the CJEU bases its argument on whether incapacity for work is temporary or of a permanent nature (CJEU, Case C-503/09 (Stewart), EU:C:2011:500 para. 37 et seq.). In the light of the above the Court treated a socalled allowance for temporary incapacity for work for young person’s subject to English legislation as an invalidity benefit in its aforementioned judgements, because the follow-up benefits, namely payment of a long-term allowance for incapacity for work, were to be expected due to a permanent incapacity for work. As it is the interest of the Member States to better integrate the disabled or 13 partially disabled persons in the labour market – not least due to this being required by the EU employment guidelines (cf. OJ (EU) L 198/47 from 26.7.2008) – benefits could come about that include elements of protection against invalidity and unemployment. Where the distinction is concerned it is first necessary to consider the phrasing of the CJEU (see II.1 b above) that requires that in order to be classified as social security benefits, benefits must be regarded, irrespective of the characteristics peculiar to different national legal systems, as being of the same kind when their purpose and object as well as the basis on which they are calculated and the conditions for granting them are identical. In other words, a type of invalidity or unemployment benefit must be assumed when undertaking a distinction here. This type comprises characteristics that are normally found in the legislation of the Member States independently of any country-specific peculiarities. The term invalidity, which is not defined in the Regulation, must be determined in close relationship with gainful employment. So invalidity benefits must be linked to a capability for work (CJEU, Case 14/72 (Heinze), EU:C: Maximilian Fuchs

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1972:98; Case 818/79 (AOK Mittelfranken), EU:C:1980:216). Invalidity can be interpreted as the risk of permanent or at least long-term reduction or loss of the capacity for work resulting from impairment of a person’s physical or mental state of health, which is regularly and typically linked with a reduced income necessitating compensation (cf. Preamble to Art. 44-49 para. 2 et seq.). Therefore a benefit is deemed an invalidity benefit if a cash benefit is concerned that is intended to compensate loss of income because the person in question is not in a position to achieve an income or only a restricted income due to the loss or reduction of his/her capacity for work and the amount of the benefit is calculated on the basis normally applied to invalidity benefits. 14 In the case Petersen (CJEU, Case C-228/07, EU:C:2008:494) a ruling was requested on a benefit under Austrian legislation that concerned the advance payment of an invalidity pension paid out of the statutory pension fund for the unemployed if, apart from capacity for work, willingness to work and readiness to work, the conditions for the granting of an unemployment benefit are met. The CJEU classified the benefit as an unemployment benefit. It was decisive for the Court that in addition to the fact that the provisions applicable to that benefit are laid down in the rules concerning unemployment benefits and that the benefit is paid by the authorities competent in regard to unemployment, the applicant for an invalidity pension must fulfil the conditions for entitlement to unemployment benefits in terms of length of affiliation; in addition, the duration of payment of the benefit must not be exceeded. The fact of the applicant being dispensed from having to show that he/she is capable of working, willing to work and available for work does not, as such, affect the very nature of the benefit at issue in the main proceedings (cf. para. 30 and 33 of the judgement). 15 Rehabilitation benefits which are not of a medical nature (see para. 10 above for these) but are instead intended for prevention purposes or restoration of the capacity for work are deemed invalidity benefits. The aim of these benefits is to restore the capacity for work. The fact that they may indirectly affect the integration of the person concerned in the labour market does not distract from their character as invalidity benefits. It is however debatable whether a benefit pursuant to Art. 3 (1)(b) is also to be interpreted as the granting of allowances to the disabled on the basis of national legislation, insofar this legislation is applicable to employed persons pursuant to Art. 1 (a) and is the basis for the right to claim such benefits. The CJEU affirms this (CJEU, Case 187/73 (Callemeyn), EU:C: 1974:57; cf. also Case 7/75 (Fracas)). In addition to the invalidity pension, invalidity benefits also include additional allowances paid from solidarity funds to those whose reduced capacity for work gives rise to a protected legal right (CJEU, Case 24/74 (Biason), EU:C:1974:99). In accordance with the judgement in the Case Schmid (Case C-310/91, EU:C:1993:221) special invalidity allowances under Belgian law (so-called allocations spéciales) are also deemed invalidity benefits in compliance with Art. 3 (1)(b) (see also the judgement in Case 39/74 (Costa), EU:C:1974:122).

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cc) Old-age benefits: (d)

The CJEU has determined in the case of old-age benefits that these are char- 16 acterised to a large extent by the fact that they ensure the subsistence of persons who have retired on reaching a specific age and who are no longer obliged to make themselves available at the unemployment office (CJEU, Case 171/82 (Valentini), EU:C:1983:189 et seq.). A subsidy towards the contributions to the health insurance scheme of a pensioner is deemed an old-age benefit (CJEU, Case C-73/99 (Movrin), EU:C:2000:369). It must therefore be paid to the pensioner, even if the pensioner resides abroad. Problems with classification arise especially for such benefits intended in many Member States to attenuate the problems of elder persons on the labour market. These benefits often include elements of provision for both old-age and unemployment. Pre-retirement benefits (Art. 3 (1) (i)) may also be concerned here (see hh below for problems of distinction here). In its Valentini judgement the CJEU was requested to rule on a guaranteed income allowance granted under French law to workers that have retired, are older than 60 years of age and that have adhered for 10 years to a social security scheme for workers by virtue of the fact that they had worked within the field of application of the unemployment insurance scheme. In accordance with its settled case law the CJEU based its decision in particular on the purpose of the benefit. It refused to classify these allowances as old-age benefits pursuant to para. 1(c), because they pursue an objective related to employment policy inasmuch as they help to release posts held by workers who are near the age of retirement for the benefit of younger employed persons (CJEU, Case 171/82 (Valentini), EU:C:1983:189 et seq.). The decision of the CJEU in the Case Otte (CJEU, Case C-25/95, EU:C: 17 1996:295) was based on similar considerations. The question to be decided concerned an adaptation allowance that under German legislation could be awarded to workers in the coal industry in accordance with specific rules. The German government was of the opinion that the adaptation allowance concerned a preretirement benefit that did not fall within the material scope of Reg. No. 1408/71. It was decisive for the CJEU, which in compliance with its case law always takes into account the purpose and basis of calculation of a benefit, that the adaptation allowance was granted at the discretion of the competent authorities and subject to the availability of budget funds from the federal government and the respective Land concerned. The main purpose of the allowance is to secure the economic situation of workers in the coal industry who have been laid off as a result of rationalization measures until such time as they reach retirement age and then have a right to claim an old-age pension. The CJEU did not fail to recognise specific similarities here with old-age benefits. Nevertheless – similar to its decision in the Case Valentini – the CJEU also clearly regards the employment policy purpose as decisive (cf. CJEU, Case C-25/95 (Otte), EU:C: 1996:295). In addition the adaptation allowance differs from old-age benefits in the conditions for its granting (no financing by means of contributions, granted Maximilian Fuchs

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for only a limited duration). For this reason it was deemed not to have the character of an old-age benefit. Recognition as an unemployment benefit pursuant to para. 1 (h) was also refused (see here para. 21 below). dd) Survivors’ benefits: (d) 18

In contrast to Reg. No. 1408/71, Reg. No. 883/2004 includes no legal definition of survivors. The term is to be determined by the legislation of the Member State competent for granting the benefit. ee) Benefits in respect of accidents at work and occupational diseases: (f)

19

Art. 3 (1)(f) provides for benefits in respect of accidents at work and occupational diseases whose coordination provisions are found in Art. 36-41. ff) Death grants: (g)

20

Special provisions concerning death grants are included in Art. 42 et seq. Art. 1 (y) defines a death grant as any one-off payment in the event of death excluding the lump-sum benefits referred to in subpara. (w). gg) Unemployment benefits: (h)

21

The coordination of unemployment benefits is effected with Art. 61-65. In order to be assigned to the risk of unemployment, a benefit must be intended to replace the remuneration lost by reason of unemployment and thereby provide for the maintenance of the unemployed person (CJEU, Case C-102/91 (Knoch), EU:C:1992:303 para. 44; Case C-57/96 (Meints), EU:C:1997:564 para. 27). These factual requirements do not apply in the case of benefits that constitute the recovery of wages due to a worker following the insolvency of his/her employer (CJEU, Case 39/76 (Mouthaan), EU:C:1976:181). The purpose, the basis of calculation and the conditions for the granting of the benefit must be taken into consideration here (see para. 7 above). In view of the above the CJEU refused to recognise the existence of an unemployment benefit in the Case Otte discussed above (see para. 17) (cf. grounds Case C-25/95, EU:C:1996:295 para. 36 et seq.). If the above formula had been taken as a basis for the decision, then most certainly the benefit would have had to had to be classified as unemployment benefit, because the benefit was granted due to unemployment and its purpose was to secure the subsistence of the recipient. If one takes a look at the specific grounds given by the Court, it is clear that this purpose alone is not sufficient for determining the assignment of the benefit. The Court points out that the amount of the adaptation allowance is determined in accordance with the provisions governing old-age benefits, the recipients of the adaptation allowance are not required to register as job-seekers, nor to keep themselves available on the employment market, nor to refrain from undertaking an activity as an employed or self-employed person the income from which exceeds a specified ceiling. In

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addition the Court refers to the opinions of the AG referring to the objective related to the employment policy pursued by the allowance and in particular involving the removal of laid-off workers from the sphere of unemployment insurance. It may therefore be assumed from the Otte ruling that for the affirmation of a benefit as an unemployment benefit the functions of replacement of wages due to unemployment and guaranteeing subsistence are not alone decisive, instead the normal conditions for the right to claim an unemployment benefit in compliance with national legislation must also be fulfilled. The CJEU clearly assumes a specific structure for a claim to unemployment benefits, although this does not necessarily mean that all characteristics provided for under the national legislation always have to be met. The CJEU reaffirmed its position in its judgement in the following Case 22 Meints (CJEU, Case C-57/96, EU:C:1997:564). The question here concerned compensation paid from a fund for agricultural development to agricultural workers whose contract of employment had been terminated as the result of the setting aside of land belonging to their former employer subject to their compliance with certain conditions. One of the conditions required that the worker was entitled to a benefit under unemployment law. The benefit concerned a single fixed payment, the amount of which was determined solely by the age of the recipient. Entitlement to the benefit lapses if the recipient is reemployed by his former employer within 12 months following termination of his former contract of employment and the benefit has to be repaid. Again the CJEU bases its arguments here on its fundamental orientation, namely that unemployment benefits are benefits granted to replace remuneration lost by reason of unemployment and thereby provide for the maintenance of the unemployed person. In addition the CJEU analyses the conditions for granting the benefit, as it did in the Case Otte. There are four points that ultimately led to the Court’s refusing to classify the benefit as an unemployment benefit (cf. para. 20-32 of the judgement): The recipient must repay the benefit if he is reemployed by his former employer within 12 months following the termination of his contract of employment. Neither entitlement to the benefit nor the amount thereof is related to the length of the period of unemployment, the benefit at issue is not a recurrent payment but is paid as a single fixed sum. The amount of the benefit is dependent solely on the age of the claimant and it is paid in addition to the unemployment benefits provided for under the national social security scheme, the right to which is merely one of the conditions for payment. So it can again be seen here that classification of a benefit as an unemployment benefit depends not only on its function of replacing lost income but also to a large extent on whether the typical conditions for unemployment benefits are fulfilled. This has led to the rise of the special problem that many Member States grant 23 benefits to (predominantly older) unemployed persons for whom certain normally required characteristics of unemployment benefits are waived. The ruling of the CJEU in the Case De Cuyper has become the guiding principle for such casMaximilian Fuchs

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es (CJEU, Case C-406/04, EU:C:2006:491). The question at issue here was a benefit in compliance with the Belgian Royal Decree concerning the regulation of unemployment. One condition of the decree specified that a wholly unemployed person of at least fifty years of age who has received at least a specific number of allowance payments as a wholly unemployed person in the two years preceding the application may be exempted from the requirement to sign on and is as a result no longer subject to the conditions of being available for work or accepting any suitable employment, of reporting to the relevant employment service or participating in a monitoring scheme or registering as a job-seeker. However, receipt of the allowance was incompatible with engaging in paid employment and was of a temporary nature. The CJEU affirmed the classification of such a benefit as an unemployment benefit. Again examination of the conditions for the granting of the benefit was decisive here, as it had been in the previous judgements. Both the purpose and the structuring of the conditions were deemed to constitute a typical unemployment benefit. The only problem here was how to handle the peculiarity of the waiving of the typical characteristic of the unemployed person being available for work. The Court was of the opinion that exception from this obligation does not affect the fundamental characteristics of an unemployment benefit (cf. para. 30 of the judgement). The Court stated that the obtaining of that exemption does not mean that the unemployed person is exempt from the requirement to remain available to the employment services inasmuch as, even if he does not have to register as a job-seeker or accept any suitable employment, he must still remain available to those services so that his employment and family situation can be monitored (para. 31 of the judgement). This argument is certainly not very convincing, because availability for the labour market is an essential criterion for the entitlement to receive unemployment benefits in virtually all Member States. Perhaps the position of the CJEU can be explained by the fact that the question of the Belgian benefit at issue is no isolated case in a European context. There are also similar provisions concerning unemployment benefits in the legislations of other countries (for example in Germany). The principles developed in the De Cuyper ruling were also decisive in the Case Petersen (see para. 14 above) for qualifying an employment benefit, even though Austrian legislation waived the requirements of capability for work, willingness to work and readiness to work. 24 The judgements of the CJEU presented above were exclusively concerned with cash unemployment benefits. Seen from an historical point of view these have always played the key role in the sphere of coordination. However, over time the Member States have drastically extended their offer of employment promotion benefits for the unemployed. Under the heading active labour market policy the participation of unemployed persons in active measures has to be promoted more intensively and cash benefits more repressed, as these only encourage people to remain passive. How the benefits of active labour market policy have to be coordinated remains an unclarified problem (see in this context the

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breakdown of the problem by Fuchs, The Implementation of Coordination Regulations in Active Labour Market Policy Provisions at National Level, in: European Commission (ed.), 50 Years of Social Security Coordination, 2010, pp. 91-110). There has been only one ruling by the CJEU to date concerning this topic. This was the judgement in the Case Campana (CJEU, Case 375/85, EU:C: 1987:253). This decision certainly provides no exhaustive information concerning the question at issue here. Nevertheless, several very crucial statements were made. The question at issue concerned an Italian applicant working in the Federal Republic of Germany who had taken part in a course in preparation of the master craftsman examination (radio and television). He applied for assistance concerning the costs of his training course. According to German legislation even people in employment are entitled to such a benefits if they have carried out an activity subject to compulsory contributions to insurance for a certain period before the start of the training measure. The AG started his opinion with the consideration as to whether benefits in the sense of Art. 3 (1)(h) can also be benefits of a preventive nature intended to avoid the onset of unemployment. The AG pointed out that there had already been a trend (1985!) towards countering the risk of unemployment with preventive measures. The Court took up this concept in its ruling. It stresses that in the light of the present economic situation the Member States had established assistance for vocational training intended both to enable persons in employment to improve their qualification to avoid the threat of unemployment and to enable unemployed persons to retain and find new employment. Both types of benefit are intended to combat unemployment (para. 9 of the judgement). In order to do justice to the considerations brought forward by the Federal Republic of Germany, namely that benefits intended to encourage vocational training may also be directed at other objectives other than the fight against unemployment, the CJEU restricted its opinion. Benefits in the sense of Art. 3 (1)(h) must be restricted to benefits for promoting vocational training which concern either persons who are already unemployed or persons who are still in employment but are actually threatened by unemployment. Whether the person in employment may be deemed to be actually threatened by unemployment is a question that must be assessed by the national authorities (para. 12 and 13 of the judgement). hh) Pre-retirement benefits: (i)

The distinction between pre-retirement benefits and unemployment benefits 25 has already been indicated above. In the Case Otte (see para. 17 above) the CJEU pointed out that a case of pre-retirement benefit was given (cf. para. 33 of the judgement), but that it was not covered by Reg. No. 1408/71 and so could not be included in the coordination. The Commission had repeatedly indicated the need for inclusion (cf. proposal from 18.7.1980, OJ C 169/22 and from 12.1.1996, OJ C 62/14). With Reg. No. 883/2004 it was the intention of the European legislation to include these benefits in the coordinating system. The Maximilian Fuchs

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necessity for this was indicated in the Preamble, namely to guarantee equal treatment and the possibility of exporting pre-retirement benefits as well as the award of family and healthcare benefits for the persons concerned. However, the rule on the aggregation of periods should not be included as only a very limited number of Member States have statutory pre-retirement schemes (cf. Recital No. 33). This corresponds to the provision of Art. 66. 26 Art. (1)(x) defines pre-retirement benefits as all cash benefits other than unemployment benefits and early old-age benefits. Characteristic for pre-retirement benefits is that they are provided from a specified age to workers who have reduced, ceased or suspended their remunerative activities until the age at which they qualify for an old-age pension or an early retirement pension. In addition entitlement is not conditional upon the person concerned being available to the employment services of the competent State. In view of this reform the question arises as to whether the decisions of the CJEU in the Cases De Cuyper and Petersen (see 23 and 14 above) are still sustainable. It is generally known that concearning De Cuyper’s case the Commission expressly opted for the classification as a pre-retirement benefit (cf. CJEU, Case C-406/04), EU:C:2006:491 para. 32). Whether or not the CJEU modifies its current case law in the light of the reform remains to be seen. ii) Family benefits: (j) 27

The rules of coordination of family benefits are contained in Art. 67-69. Pursuant to Art. 1 (z) family benefits are all benefits in kind or in cash intended to meet family expenses, excluding the special childbirth and adoption allowances mentioned in Annex I. Pursuant to the case law of the CJEU advances of maintenance also fall under family benefits (CJEU, Case C-85/99 (Offermanns), EU:C:2001:166; Case C-255/99 (Humer), EU:C:2002:73; Case C-302/02 (Effing), EU:C:2005:36). The European legislature did not adhere to this legal opinion. Since advances of maintenance allowances are intended to compensate for a parent’s failure to fulfil his/her legal obligation of maintenance to his/her own child, it is an obligation derived from family law. Therefore, these advances should not be considered as a direct benefit from collective support in favour of families (cf. Recital 36 in the Preamble). For this reason the legal definition in Art. 1(z) excludes advances of maintenance from the term family benefits and also therefore from the material scope of the Regulation (see Art. 1 para. 41). The former distinction between family benefits and family allowances in Art. 1 lit. u) Reg. 1408/71 has been dropped. This will have a significant impact on the application of overlap provisions, see for example CJEU, C-347/12 (Wiering), EU:C:2014:300, decided by the CJEU on the basis of Reg. 1408/71. The main controversy concerning the problem of whether Luxembourg’s family allowances and the German Elterngeld and Kindergeld were benefits of the same kind, in which case the overlap provision would have had to be applied. Under

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Reg. 883/2004 these problems will no longer emerge since all family benefits will be treated in the same way. Pursuant to the case law of the CJEU – with its emphasis on the purpose of 28 the benefit and the conditions on which it is granted applicable to the distinction between social security and social assistance – Art. 3(1)(j) covers benefits that are granted automatically to families that fulfil certain objective criteria, in particular with regard to their size, income and financial resources. The fact that the granting of such a benefit is not subject to the payment of contributions is irrelevant (CJEU, Case C-78/91 (Hughes), EU:C:1992:331). According to the CJEU (Case C-245/94 (Hoever), EU:C:1996:379) these also include benefits such as the child-raising allowance pursuant to the German Law on child raising benefits, which is automatically granted to persons fulfilling certain objectives, legally defined criteria, without any individual and discretionary assessment of personal needs and which is intended to meet family expenses (to remunerate the service of bringing up a child, to meet other costs of caring for and bringing up a child and to mitigate the financial disadvantages entailed in giving up income from full-time employment). The same principles must also apply for the Law on parental benefits. Following this judgement the CJEU once again affirmed its opinion in the Case Sala Martinez (CJEU, Case C-85/96 (Sala), EU:C:1998:217) and pointed out that the child-raising allowance pursuant to the Law on child raising benefits constitutes a family benefit within the meaning of Art. 3(1)(j) and at the same time a social advantage within the meaning of Art. 7(2) of Reg. No. 1612/68 (now Reg. No. 492/2011) as it is granted among others to workers who work part-time. As Reg. No. 492/2011 is of general importance for the freedom of movement of workers, Art. 7(2) of this Regulation can also apply to social advantages that simultaneously fall within the special scope of the Regulation (cf. CJEU, Case C-111/91 (Commission / Luxembourg), EU:C:1993:92). For family allowance and child-care allowance according to Austrian legislation see CJEU, Case C-543/03 (Dodl and Oberhollenzer), EU:C:2005:364, Case C-352/06 (Bosmann), EU:C:2008:290. An allowance for home child-care also constitutes a family benefit (CJEU, Case C-333/00 (Maaheimo), EU:C: 2002:641). The Court has qualified the parental leave allowance under the Social Security Code of Luxembourg as a family benefit (CJEU, C-216/12 and 217/12 (Hliddal), EU:C:2013:568). The fact that the parental leave is accorded by the employer does not bring the allowance under the term “pay” in the sense of Art. 157 TFEU. And it is not an unemployment benefit, since parental leave does not lead to a loss of employment, but only to its suspension. The child bonus provided by Luxembourg law is a family benefit. The fact that the public contribution to a family’s budget takes the form of a cash benefit payable under the national tax law regime and that the child bonus has its origin in a tax reduction for children has no bearing on the classification of that benefit as a family benefit (CJEU, C-172/12 (Lachheb), EU:C:2013:689 para. 37).

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d) Declarations pursuant to Art. 9 29

Art. 9 obliges the Member States to give notification of the legislations and schemes referred to in Art. 3 (1) in declarations. 2. Comprehensive integration of national schemes (para. 2)

30

Unless otherwise provided for in Annex XI, Art. 3 (2) the Regulation applies to general and special social security schemes, whether contributory or non-contributory, and to schemes relating to the obligations of an employer or ship-owner. The national schemes of social security are therefore encompassed in their entirety, irrespective of whether the system concerned applies generally or only to specific groups of the population. It is at the same time clear that the inclusion of contributory and non-contributory benefits renders the method of financing the system irrelevant (CJEU, joined Cases 379-381/85 and 93/86 (Giletti), EU:C:1987:98). In this respect the diversity of the social security schemes of the Member States is also adequately taken into consideration in the structure of the coordinating provisions of Community legislation. This also means that the desire of the Member States to decide themselves on the design of their social security schemes is taken in to account. The CJEU decided similarly in the Case Zaoui (Case 147/87, EU:C:1987:576), where making reference to the Giletti judgement it stated that supplementary allowances financed by taxes for the recipients of old-age, survivor or invalidity pensions and provided by so-called Fonds national de solidarité (National Solidarity Fund) fall under the scope of the Regulation. It is questionable whether the employer’s continued payment of wages to a worker in the case of sickness is covered by para. 2, i.e. whether it constitutes one of the social security schemes listed in Art. 3(2) that grants one of the benefits listed in para. 1. This question was the subject matter of the decision in the Case Paletta (CJEU, Case C-45/90, EU:C:1992:236 et seq.). Contrary to the opinion of the German and Dutch governments, the CJEU affirmed this question. It is true that in the Case 171/88 (Rinner-Kühn), EU:C:1989:328 the Court decided that continued payment of wages by the employer in the case of sickness in compliance with the Pay Continuation Law falls under the scope of the term “pay” pursuant to Art. 157 TFEU (= Art. 141 TEC). Nevertheless, this does not mean that benefits provided by the employer in this connection cannot simultaneously constitute sickness benefits within the meaning of the Regulation. In the opinion of the CJEU the question of material scope depends on the fundamental characteristics of the benefit, in particular its purpose and the conditions for its grant, and not on whether or not the national legislation describes the benefit as a social security benefit. In the light of the above the CJEU states with regard to continued payment of wages that the benefits in question are granted to the worker only in the event of illness and that their payment for a period of up to six weeks suspends payment of the daily sickness benefits provided for in the German social security code which are incontestably sickness

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benefits. The principles of this judgement must also be applied to the six-week continued payment of wages under Dutch legislation and securing the first six months of illness under the legislation of the United Kingdom. 3. Special non-contributory cash benefits (para. 3)

Art. 3 (3) clearly determines that the special non-contributory cash benefits 31 formerly regulated in Art. 4 (2 a) Reg. No. 1408/71 fall within the scope of the Regulation. Reg. No. 883/2004 has now regulated this type of benefit in a specific provision (Art. 70). 4. Ship-owners obligations (para. 4)

Art. 3 (4) stipulates that the special provisions for the individual types of 32 benefits pursuant to Title III, intended for the coordination of the respective national regulations, shall not affect the legislative provisions of any Member State concerning a ship-owner’s obligations. It is about those social security schemes in which the Member States have imposed obligations on the ship-owners (or employers), which are similar to those of statutory social security benefit institutions or replace these. 5. Exclusions (para. 5) a) Exclusion of social and medical assistance aa) Doctrinal background

The system of Art. 3 is based on the distinction between social security and 33 social assistance. Only the former shall fall within the scope of the Regulation and thus also coordination. Because this complies with the objective of Art. 48 TFEU to promote the freedom of movement of migrant workers. Originally this contrastive pair social security / social assistance was clear automatically and the distinction easy to apply in practice (cf. in this respect Pennings, Introduction to European Social Security Law, 4. ed. 2003, p. 64 et seq.). Social security benefits constituted the equivalent of entitlements based on contributions paid and to which there was a legal right. Social assistance benefits were non-contributory benefits that were not dependent on contributions on the part of the recipient. The entitlement arose solely on the basis of certain needs that were defined respectively in more detail in the legislation. There was often no right to social assistance benefits. These lay within the discretion of the competent decisionmaking authority. Due to the extent that the Member States modified their benefit schemes and in particular provided for rights also in the area of social assistance, the original distinction between social security benefits and social assistance benefits was no longer clear. Elements of benefits similar to social assistance, in that they fell within the discretion of the decision-maker, were even included in the sector of social security benefits. So it was no surprise that this led

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to a multitude of legal disputes. National institutions refused to apply coordination regulations, because they were of the opinion that certain benefits did not fall within the scope of Reg. No. 1408/71 due to their belonging to social assistance. 34 Against this background of predestined problems, the CJEU was faced in its case law with a difficult situation, on the one hand with regard to Art. 4 (1)(4) Reg. No. 1408/71 which required it to distinguish between social security schemes and social assistance schemes and on the other hand not having any legal criteria for doing so. If one looks at the case law of the CJEU, it is clear that the principles it regarded as relevant for the distinction were developed in stages (cf. in this respect van Raepenbusch, La sécurité sociale des personnes qui circulent à l’intérieur de la Communauté Economique Européenne, p. 258 et seq.). 35 From the very outset the CJEU stressed the problems involved in making the distinction and the possibility of clear-cut allocation to one or other of schemes. In its decision in the case Frilli, still made with respect to the insofar analogous Art. 2 Reg. No. 3, the Court held (CJEU, Case 1/72 (Frilli), EU:C:1972:56 para. 11/13) “Although it may seem desirable from the point of view of applying the regulation, to establish a clear distinction between legislative schemes which come within social security and those which come within assistance, it is possible that certain laws, because of the classes of persons to which they apply, their objectives and the detailed rules for their application, may simultaneously contain elements belonging to both categories mentioned and thus defy any general classification.” The court regards need, the absence of a requirement for periods of employment, membership or contribution and consideration of each individual case as characteristics of assistance (para. 14 of the judgement). For this reason the CJEU classified in this specific case a benefit for a guaranteed income for old people provided for by Belgian legislation as a social security benefit, because the relevant provisions did not prescribe consideration of each individual case, which is a characteristic of assistance, and confers on recipients a legally defined position giving them the right to a benefit which is analogous to the oldage pensions mentioned in Art. 2 Reg. No. 3. 36 In view of the fact that the conferring of a legal right within the scope of social assistance is usual in many countries, the CJEU defined its case law more precisely in that the distinction between benefits excluded from the scope of Reg. No. 1408/71 and those that come within it must be undertaken mainly on the basis of the characteristic factors relating to each benefit, in particular its purpose and the conditions for its grant (cf. CJEU, Case 139/82 (Piscitello), EU:C:1983:126). Based on this criterion the CJEU judged the Italian social pension in question (pensione sociale) to be a social security benefit. Because the social pension fulfils a dual purpose which consists not only in guaranteeing a minimum means of subsistence to persons who are entirely outside of the social security system but also in supplementing the income of recipients of inadequate social security benefits.

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This approach was defined more precisely in the significant Hoeckx decision, 37 in that a benefit only falls within the sphere of social security within the meaning of Reg. No. 1408/71 if in any event it covers among other things one of the risks specified expressly in Art. 4(1) Reg. No. 1408/71 (CJEU, Case 249/83 (Hoeckx), EU:C:1985:139 para. 12). As was the case in Frilli judgment, the need criterion, the absence of the stipulation of periods of employment, membership or contribution and the stipulation that other rights to social benefits or rights to maintenance have been exercised are essential criteria for assistance. For this reason the CJEU assessed the minimum subsistence allowance granted pursuant to Belgian law in question to be a social assistance benefit within the meaning of Art. 4(4) Reg. No. 1408/71 (now Art. 3(5). It must, however, be considered whether the benefit constitutes a social advantage pursuant to Art. 7(2) Reg. No. 1612/68 (Reg. No. 492/2011), despite the refusal to regard it as being covered by the scope of the Regulation. bb) Distinction to non-contributory benefits

Due to the category of hybrid benefits developed by the CJEU, it is necessary 38 to take into account the special non-contributory cash benefits pursuant to Art. 70 when assessing whether or not a benefit is excluded in compliance with para. 5. Only on this basis can reliable classification of a benefit be undertaken. cc) Revised formulation

Revised formulation by para. 5.

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6. Compensation schemes

Art. 4 (4) Reg. No. 1408/71 excluded benefit schemes for victims of war or its 40 consequences from the scope of the Regulation. Reg. No. 883/2004 also adopted this exclusion. However, this fact of exclusion was considerably extended within the framework of the Common Position of the Council dated 17 December 2008. It now includes all benefits in relation to which a Member State assumes the liability for damages to persons and provides for compensation. For example Art. 3 (5)(b) now includes - in addition to victims of war and military action or their consequences - victims of crime, assassination or terrorist acts; victims of damage occasioned by agents of the Member State in the course of their duties or victims who have suffered a disadvantage for political or religious reasons or for reasons of descent. Clearly the Member States agreed to this extension, because various Member States have many often very different special regulations for the fields covered in (b) and in which the special responsibility of the Member State concerned and the proximity between State and citizen is expressed. Consequently, nationals of other Member States that do not have the connection to this state should not participate in these benefit schemes.

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7. Benefits for the victims or war and military action or their consequences

Many decisions of the CJEU concerned the question of whether a scheme for the victims of war existed that would lead to its exclusion from coordination. A fundamental decision from the 1970 s concerned the question of whether a Belgian national could invoke a French regulation vis-à-vis a French social insurance institution that provided for special advantages for persons who had been taken prisoner of war as members of the French or allied armed forces. The Belgian plaintiff could prove that as a Belgian soldier he had been a prisoner of war in Germany for 60 months. In its decision (CJEU, Case 9/78 (Gillard), EU:C: 1978:152) the court stressed the fact that a provision of this type is or is not inserted in national security legislation is not in itself decisive in determining that the benefit system for the victims of war is a social security benefit. So the position in national legislation is meaningless. Of more importance are the characteristic factors of the individual benefit, in particular its purpose and the conditions for its grant (cf. para. 10 et seq. of the judgement). In this specific case the CJEU saw the main purpose of the relevant French provision as providing former prisoners of war with a testimony of national gratitude for the hardships endured on behalf of France and its allies, so that the provisions here constitute a benefit system of the victims of war. The CJEU decided in the same manner in a dispute concerning a French plaintiff who invoked Belgian provisions that provided for benefits for Belgian workers who had suffered damage to their health attributable to their participation in the battles of the allied armed forces (CJEU, Case 207/78 (Even), EU:C:1979:144).This judgement is important in that it introduced a case law according to which such cases of a specific provision under victims of war legislation cannot constitute an advantage within the meaning of Art. 7 (2) Reg. No. 1612/68. In the Case Baldinger the CJEU affirmed the aforementioned decision, even adding that the result could not be corrected via the application of Art. 45 (2) TFEU (CJEU, Case C-386/02 (Baldinger), EU:C: 2004:535 para. 19 et seq.). 42 It is a very different matter, however, if provisions are concerned that refer to the status of an employed or self-employed person. For this reason a former decision of the CJEU did not regard provisions of the (German) Law Regulating the Restitution of National Socialist Injustice in Social Security as special provisions for the victims of war, but simply as provisions supplementing or modifying the general provisions in the field of social security and therefore not subject to the material scope of the Regulation. (CJEU, Case 70/80 (Vigier), EU:C: 1981:19). The CJEU also did not recognise the provisions of §§ 271 et seq. SGB VI concerning contribution periods completed in the parts of the territory where the social security legislation of the German Reich was applicable during the period 1937 to 1949 and that lay outside of the territory of the Federal Republic of Germany as provisions for the victims of war within the meaning of Art. 4(4) Reg. No. 1408/71 and therefore the former provision of Annex VI Part C No. 1 of Reg. No. 1408/71 that provided for consideration only subject to the 41

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recipient being resident in the Federal Republic of Germany, as incompatible with Art. 48 TFEU (CJEU, Case C-396/05 and C-419/05 (Habelt and Möser), EU:C:2007:810 para. 62 et seq.). The CJEU decided in the same manner in the same judgement for periods of contribution completed under Foreign Pension Law (CJEU, Case C-450/05 (Wachter), EU:C:2006:75 para. 86 et seq.). This decision is an interesting example of how the completely understandable national interests of the Member States to give priority to the social security of their resident population which have become less important than the European concern of integration. Even if benefits fall under Art. 3(5) and are therefore excluded from coordina- 43 tion, it is conceivable that those concerned have entitlements to benefits based on the respective national regulations. Whereby they may not be refused benefits solely on the basis of residence requirements. This would not be compatible with Art. 21(1) TFEU (= Art. 18(1) EC; cf. CJEU, Case C-499/06 (Nerkowska), EU:C:2008:300; Case C-221/07 (Zablocka-Weyhermüller), EU:C:2008:681). 8. Special schemes for civil servants a) The problems involved

Art. 4 (4) Reg. No. 1408/71 excluded special schemes for civil servants and 44 people treated as such from the scope of Reg. No. 1408/71. Formerly it was common ground that coordination would be impossible here due to the specific design of these special schemes for civil servants (cf. former Case law CJEU, Case 129/78 (Lohmann), EU:C:1979/59). b) Necessity of including civil servants in the coordination

On 13 December 1991 the Commission submitted a proposal (KOM(91)528 45 final) in which it took the view that the material scope must be extended to include the special schemes for civil servants and people treated as such as a basic principle. It believed coordination of the social security schemes for these persons was necessary in order to achieve one of the Community objectives, namely ensuring freedom of movement. The Commission’s proposal was not at first realised. A factor that provoked further development as envisioned by the Commission was most certainly the decision of the CJEU in the Case Vougioukas (CJEU, Case C-443/93 (Vougioukas), EU:C:1995:394). The case concerned a Greek doctor who was subject to a special scheme for civil servants with regard to his old-age pension. The competent Greek institutions refused to recognise periods the doctor had completed while working in German public hospitals. The plaintiff was of the opinion that Art. 4 (4) Reg. No. 1408/71 was incompatible with Art. 45 and 48 TFEU. The CJEU did indeed refuse to acknowledge this opinion in such an extensive form. Nevertheless, the CJEU stressed (cf. para. 31 et seq. of the judgement) that the Community legislation had not yet adopted the measures necessary to extend the material scope of Reg. No. 1408/71 to special

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schemes for civil servants and people treated as such, with the result that Art. 4 (4) Reg. No. 1408/71 leaves a considerable lacuna in the Community coordination of social security schemes. Making reference to the statements of the AG, the CJEU stated that the exclusion in Art. 4 (4) Reg. No. 1408/71 may have been justified at the time when the Regulation was adopted by the existence of profound differences between the national schemes. Nevertheless, in the light of the task entrusted to the Council by Art. 48 TFEU, the existence of such technical difficulties cannot justify indefinitely the lack of any coordination of special schemes for civil servants and people treated as such. For this reason the CJEU concluded that by not introducing any coordination in the sector following the expiry of the transition period provided for with regard to freedom of movement of workers, the Council has not fully discharged its obligation under Art. 48 TFEU. c) Inclusion of civil servants by means of Reg. No. 1606/98 of the Council dated 29 June 1998

On the 29.6.1998 the Council amended Reg. No. 1408/71 for the purpose of including special schemes for civil servants and people treated as such by means of Reg. No. 1606/98 (cf. OJ L 209 from 25.7.1998). It is clear from the recitals that the aforementioned judgement in the Case Vougioukas was to a large extent decisive for the amendment. 47 The recitals indicate the difficulties involved in including the special systems for civil servants in the coordination. These difficulties result from the fact that in some Member States there is no system of coordination between the special schemes and the general scheme, that such schemes have a limited scope and are based on special budgetary arrangements and reward structures, for example eligibility based on long periods of service. In addition there is no common definition of the notion of “civil servant”. The legislature was forced to take account of these national peculiarities and difficulties. The solution lay in principle in deleting the former exclusion of the special systems for civil servants and people treated as such and categorically asserting their inclusion. 46

d) The provisions of Reg. No. 883/2004 48

In principle Reg. No. 883/2004 adopts the former rules and principles of Reg. No. 1408/71 with regard to civil servants. However, a specific definition is now applied to these. Pursuant to Art. 1 (d) civil servant means a person considered to be such or treated as such by the Member State to which the administration employing him/her is subject. And pursuant to Art. 1 (e) special scheme for civil servants means any social security scheme which is different from the general social security scheme applicable to employed persons in the Member State concerned and to which all, or certain categories of, civil servants are directly subject.

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In order to take into account the unique characteristic of these special 49 schemes, coordination law should also, with regard to individual questions, create provisions that apply specifically to civil servants. The specific conflict rules of Art. 11 (3)(b) and Art. 13 (4), for example, apply to the social law statute for civil servants. Special rules must also be taken into account for the individual groups of benefits. Art. 49 must be emphasised for invalidity benefits and Art. 60 for old-age and survivors’ pensions. Where sickness, maternity and equivalent paternity benefits are concerned, 50 Art. 32 (2) implementing Reg. No. 987/2009 must be observed. For Member States listed in Annex 2, the provisions concerning benefits in kind in the aforementioned benefit areas are applicable only to the extent mentioned therein if they have rights to benefits in kind based exclusively on a special scheme for civil servants.

Article 4 Equality of treatment Unless otherwise provided for by this Regulation, persons to whom this Regulation applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof. I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Equality of treatment according to Art. 4 Reg. No. 883/2004 . . . . . . . . . . . 1. Spirit and purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Commentary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Benefits and obligations in the field of social security . . . . . . . . . . . b) Under the legislation of any Member State. . . . . . . . . . . . . . . . . . . . . . . . c) Unless otherwise provided for by this Regulation … . . . . . . . . . . . . . d) Equality of treatment: direct and indirect discriminations . . . . . . . e) Restrictions of free movement of persons without discrimination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f) The persons to whom the Regulation applies . . . . . . . . . . . . . . . . . . . . . g) Enjoying the same benefits and being subject to the same obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Equality of treatment according to EU anti-discrimination law . . . . . . . . . 1. Spirit and purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Directive 79/7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 2 3 3 4 6 7 9 10 12 13 13 18

I. Introduction

The rule laid down in Art. 4 goes back to previous acts (Reg. No. 3/58, pub- 1 lished in OJ No. 30, p. 561, and Reg. No. 1408/71) and has been reworded by Reg. No. 883/2004. It contains a major rule for coordination of social security systems, which can also be found in almost every international security convention. As does its former versions, Art. 4 ensures equality of treatment in all matters of social security and aims to sustain free movement of persons within the European Union. Some existing domestic laws still might include provisions

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which distinguish between citizens and foreigners, for example by allowing payment of benefits solely to nationals (Case C-399/09 (Landtová), EU:C: 2011:415). Obviously, such rules disadvantage EU citizens and could keep them from using the right of free movement granted by the Treaties. They are incompatible with EU law, in particular with the aim of creating a single market. Therefore, Art. 4 prohibits discrimination based on nationality; it confers a legally protected right to obtain the “same benefits and … obligations … as the nationals” and it is focused on Member State law in the field of “social security”. The background of the Article, however, is broader. The provision iterates the content of Art. 18 and 45 TFEU (ex-Art. 12 and 39 TEC), which both adhere to the idea that freedom of movement must “entail the abolition of any discrimination based on nationality” Art. 45 TFEU), such as discrimination related to living and working conditions, social welfare etc. It is related to European citizenship, a concept which allows citizens of the European Union who lawfully reside in the territory of a host Member State to rely on Art. 18 TFEU “in all situations” falling within the scope ratione materiae of EU law (Case C-184/99 (Grzelczyk), EU:C:2001:458, para. 30/31; Case C-85/96 (Martinez Sala), EU:C: 1998:217). Furthermore, and in addition to nationality-based discrimination, the European legal system contains rules against discrimination on the basis of gender, religion or belief, racial or ethnic origin, disability, age or sexual orientation. Those anti-discrimination rules, Art. 18 and 45 TFEU mentioned above, as well as Art. 4 Reg. No. 883/2004 all derive from the general, well-known “equality of treatment” rule requiring “that similar situations shall not be treated differently unless the differentiation is objectively justified” (Case C-125/77 (Koninklijke Scholten-Honig N.V, «Isoglucose»), EU:C:1978:187). Equality of treatment is a main principle of European law and now anchored in Art. 20 EU Charter of Fundamental Rights, which contains the most general formulation possible: “Everyone is equal before the law”. According to common legal traditions, the European Court of Justice has developed several criteria to clarify the principle and check whether acts of public authority (Member State regulations or practices and measures taken by the EU) conform to the requirement of equality of treatment. These criteria are also relevant in the field of Art. 4 where “equality of treatment” in social security matters should be discussed in connection with the EU anti-discrimination law as a whole, especially EU Directives 79/7, 2006/54 and 2000/43, 2000/78 and 2004/113 (see section III. below). II. Equality of treatment according to Art. 4 Reg. No. 883/2004 1. Spirit and purpose 2

As previously mentioned, Art. 4 grants equal rights in all fields of social security covered by Reg. No. 883/2004 (see Art. 3 above). Member State law, which discriminates against nationals of other Member States is overridden by EU law and, according to the principles of supremacy (Case 6/64 (Costa/ENEL), EU:C: 102

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1964:66) and direct effect (Case 26/62 (Van Gend & Loos), EU:C:1963:1), is inapplicable. Whenever an international agreement of social security ratified by a Member State refers solely to nationals, it is extended to EU citizens subject to the legislation of this Member State. With regard to Art. 4 Reg. No. 883/2004, discrimination obviously based on nationality is never justified. Art. 4 Reg. No. 883/2004 also prohibits indirect discrimination but it is subsidiary to more specific rules such as Art. 5, 6 and 7 Reg. No. 883/2004 which provide for equal treatment of facts, aggregation of periods and waiving of residence rules. As a principle deriving from the Treaties, equality of treatment also binds EU institutions, especially the lawmaking authorities (Council/European Parliament/ Commission). Art. 4 differs from the rule announced in Art. 5. Art. 4 grants equal treatment to individuals whereas Art. 5 proclaims the assimilation of facts; the latter encounters a special technique of coordination, a “legal fiction”, whereas Art. 4 includes a fundamental right. The aim, however, is identical: both help to ensure freedom of movement for workers and other citizens of all Member States. 2. Commentary a) Benefits and obligations in the field of social security

The terms “benefits” and “obligations” show that equality of treatment is 3 broad and may be claimed whenever a domestic rule concerning social security requires citizenship. It clearly applies to cases where an individual is entitled to benefits, such as old age pensions (Case C-399/09 (Landtová), EU:C:2011:415), disability allowances (Case C-63/76 (Inzirillo), EU:C:1976:192), concerning disability allowance), family benefits (Pinna) or other benefits within the meaning of the Regulation (see Art. 3 Reg. No. 883/2004), including “special noncontributory cash benefits” within the meaning of Art. 70 (Case C-333/13 (Dano), EU:C:2014:2358, para. 55). All corresponding benefits must be allowed regardless of nationality. Moreover, it does not matter whether benefits are paid in money (as is generally the case for pensions, supplements on pensions, incapacity allowances, family benefits, sickness pay etc.) or in kind (e.g. healthcare, ambulance service, medical aids). The competent Member State must observe the principle as well as the Member States of residency or stay, for example while providing healthcare to a person insured in another Member State (Art. 17-19). “Benefits” and “obligations” also include questions concerning membership and exemption from membership. The important question whether a person is covered or not by the legislation of a Member State depends exclusively on rules concerning conflict of law (Art. 11-16), mainly on the lex loci laboris-rule (Art. 11 (3) Reg. No. 883/2004). Nationality is not relevant and cannot be required for acceding to a social security system (a pension fund, healthcare, et al.), neither can a person lose membership as a result of his or her passport. Furthermore, Member States are not allowed to distinguish between nation-

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als and other European citizens when it comes to payment of social security contributions (Case C-18/95 (Terhoeve), EU:C:1999:22; in fact, this decision held there was a violation of the free movement of workers without examining the presence of discrimination, para. 41). In summary, the amount, the percentage, the procedure for recovery and possible remissions of contribution duties must be the same as those used for nationals. On the other hand, a migrant who works and therefore is insured in a Member State where contributions are higher than in his country of residence cannot claim discrimination. This kind of difference is due to the fact that Member State legislations differ from each other and, evidently, do not correspond to the concept of equal rights, which supposes the presence of a single legal system (typically the law of one country, sometimes the law of the European Union). Once a migrant worker is insured in one Member State, however, the lex loci laboris must not place him “at a disadvantage compared to those who pursue all their activities in the Member State where it applies” (Judgment of the Court, joined Cases C-393/99 and C-394/99 (Hervein et al.), EU:C:2002:182, para. 51). A disadvantage can for example occur if EU citizens, other than nationals, must pay higher contributions than usual without being entitled to additional benefits (Case C-18/95 (Terhoeve), EU:C:1999:22, para. 18) or if they are subject to social contributions “on which there is no return“ (see, to that effect, joined Cases C-393/99 and C-394/99 (Hervein et al.), EU:C:2002:182, para. 51; Case C-493/04 (Piatkowski), EU:C:2006:167, para. 34; Case C-345/09 (van Delft et al.), EU:C:2011:57, para. 100 and 101; and Case C-388/09 (da Silva Martins), EU:C:2011:439, para. 72 and 73). According to the law of a Member State, migrant workers and nationals might be required to make the same amount of contributions but only the latter are enabled to earn benefits (for example, as a result of the length of time they are subject to the domestic scheme). In such a case, exempting a migrant worker can be justified if his or her situation differs significantly from the one that nationals are exposed to, because equality of treatment does not only mean that similar situations must be treated in a similar way; it also signifies that different situations must be treated differently. Equality of treatment must also be observed in institutional concerns, for example by choosing stakeholders for representative units or other aspects. The former Art. 3 (2) Reg. No. 1408/71 mentioned expressly that “The provisions of paragraph 1 shall apply to the right to elect members of the organs of social security institutions or to participate in their nomination, but shall not affect the legislative provisions of any Member State relating to eligibility or methods of nomination“. Under Reg. No. 883/2004, this results from the general rule of Art. 4. Art. 21(1) Reg. No. 987/2009 specifies that an employer “who has his registered office or place of business outside the competent Member State shall fulfil all the obligations laid down by the legislation applicable to his employees, notably the obligation to pay the contributions provided for by that legislation, as if he had his registered office or place of business in the competent Member State”. This rule however does not mention nationality; it assimilates

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employers domiciled abroad to employers situated in the competent country and hence has the same effect as Art. 5. b) Under the legislation of any Member State

The term “legislation” is defined in Art. 1 (l). It covers “laws, regulations and 4 other statutory provisions” as well as “all other implementing measures“ relating to social security. According to Art. 9 every Member State notifies the legislation referred to in Art. 3. Hence, equality of treatment provided by Art. 4 Reg. No. 883/2004 seems to have a narrow meaning and only relates to laws about healthcare, pensions, unemployment benefits etc. The scope of the principle however goes beyond legal rules focused on social security schemes. It can also apply to legislations, which mainly govern other items, such as taxation (law on income tax determines the right to family allowances: Case C-352/06 (Bosmann), EU:C:2008:290), liability or family law. What matters is that the substantive rule has a sufficient connection to social security and that it is decisive for a “benefit” or an “obligation” concerning social security. Sometimes, discriminatory rules are not laid down in a national law but in in- 5 ternational treaties concerning social security. Hence, if two or more Member States conclude conventions with each other (see Art. 8 (2) Reg. No. 883/2004), the benefits of such conventions apply to all persons under the scope of Reg. No. 883/2004). The former Art. 3 (3) Reg. No. 1408/71 included an explicit provision which was abandoned in order to shorten the rule. It can however be assumed that the same solution is still valid under the new Regulation. Furthermore, whenever a Member State concludes a convention with a third country, the principle of equal treatment requires that the Member State grant “nationals of other Member States the same advantages as those which its own nationals enjoy under that convention unless it can provide objective justification for doing so” (Case C-55/00 (Gottardo), EU:C:2002:16; reversal from the GranaNovoa Case (Case C-23/92 (Grana Novoa), EU:C:1993:339) where the Court held that a convention concluded between a single Member State and one or more non-member countries does not fall within the scope of “legislation”). c) Unless otherwise provided for by this Regulation …

It must also be borne in mind that the practical impact of the principle is im- 6 portant because it applies to every branch of social security mentioned in Art. 3 and that exceptions are not allowed, either for the Member States or for the EU legislator. The formulation used by Art. 4 (“unless otherwise provided for by this Regulation”) suggests that waivers might be accorded and discrimination allowed if provided for by the Regulation. Reg. No. 883/2004 however does not include any exceptions. EU institutions are not permitted to adopt regulations which impede the achievement of the aims set out by the Treaties, especially Art. 45 and 48 TFEU (Pinna I, para. 22). According to the Court, coordination must secure the equal treatment laid down by Art. 45 TFEU (Pinna I, para. 24) Bettina Kahil-Wolff

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and must not add to the disparities caused by national legislation (Pinna I, para. 22). As stated by the Court in the Pinna I Case concerning a French family allowance (Case C-41/84 (Pinna I), EU:C:1986:1), EU institutions are not permitted to adopt rules which provide unequal treatment among citizens; such rules are void as contrary to the Treaties, especially in respect to Art. 45 TFEU mentioned above. The Court of Justice also declared void a rule adopted by the Council in 1983. According to this rule only the occupation insured in Germany was taken into account in determining entitlement to an occupational invalidity pension; it was “not of such a nature to guarantee the equal treatment (…) and therefore (had) no place in the coordination of national law (…)” (judgment of the Court Case C-20/85 (Roviello), EU:C:1988:283). Moreover, in the field of social security, for the moment, there is not a single decision of the Court of Justice justifying an overt discrimination based on nationality. All national laws concerned thus far have been declared incompatible with the principle laid down in Art. 4. The principle must ensure equal treatment in matters of social security by abolishing “all discrimination in that regard deriving from national legislation of Member States” (Case C-332/05 (Celozzi), EU:C:2007:35, para. 22). This interpretation is consistent with the Treaties, especially with Art. 45 TFEU. Art. 45 (4) TFEU allows limitations justified on the grounds of public policy, public security or public health but these limitations are not related to equality of treatment as mentioned in para. 2 of Art. 45 TFEU. It must also be recalled that, according to Art. 45 para. 4 TFEU, Member States may impinge on the free movement of workers in the context of employment in the public service and employ only nationals as civil servants. Thus, Art. 11 (3) (b) Reg. No. 883/2004 declares that a civil servant is “subject to the legislation of the Member State to which the administration employing him/her is subject”. This rule, however, is just a consequence of the possibility given by the Treaty, but it does not allow discrimination in and of itself. It mostly concerns ambassadors, consuls, other diplomats and people working in the field of external relations. It might also be mentioned that equality of treatment provisions settled by international social security conventions are generally limited to certain areas (mostly old age and disability benefits) and allow different types of waivers, for instance by allowing unilateral statements (reservations within the meaning of Art. 2 d) Vienna Convention on the Law of Treaties of 23 May 1969) or by excluding some benefits from the scope of equality of treatment. Such reservations are not accepted in the field of EU law at all (Case C-6/64 (Costa/ENEL), EU:C:1964:66, para. 9). d) Equality of treatment: direct and indirect discriminations 7

National laws which deprive foreigners of social benefits or apply specific obligations to them can take different forms. Some national rules might expressly refer to domestic persons only or contain special provisions clearly applying to foreigners. According to Art. 4, these or similar stipulations are prohibited and the person discriminated can claim the same benefits and obligations as na106

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tionals. In social security legislation of the EU Member States, however, such openly discriminatory provisions are not very frequent. They are clearly forbidden by EU law and, during the last 50 years, have thus almost disappeared. One of the reasons might be that social security generally covers persons in connection with their presence in a country as tax paying residents, workers, self-employed entrepreneurs or other people contributing to the national product. Those people pay contributions; hence depriving them of benefits makes no sense, economically as well as in terms of domestic constitutional law. On several occasions, Court decisions specifically identified discriminations based on nationality in the field of social security. A judgment from 1976 concerned a French law which limited payment of a certain disability allowance to French nationals alone (CJEU, Case 63/76 (Inzirillo), EU:C:1976:192, para. 3). Later on, in 1991, the Court condemned France for having adopted a law which had imposed additional conditions on nationals of Member States other than France in the field of old-age allowances; France was declared to have failed to fulfil its obligations although the law in question was, in practice, no longer applied to EU nationals (Case C-307/89 (Commission/France), EU:C:1991:245, para. 11 and 12). In 2006, the Court handed down a preliminary ruling related to Belgian unemployment benefits legislation which treated Belgian nationals better than nationals of other Member States (Case C-346/05 (Chateignier), EU:C:2006:711). The aforementioned Case concerning the Czech Republic presented a direct discrimination in the field of old age pensions (Case C-399/09 (Landtová), EU:C: 2011:415). Other cases concern more subtle provisions. In the Celozzi decision, for ex- 8 ample, the Court was faced with a German rule pursuant to which a migrant worker from Italy was placed in another tax class than his German colleagues; the change of tax class was based on the fact that his spouse was living in Italy and led to a reduction in his sick pay (Case C-332/05 (Celozzi), EU:C:2007:35). The rule in question did not itself lay down any formal difference in treatment between nationals and European citizens, as is generally the case of most of the similar national provisions affecting migrant workers. Nevertheless, such provisions are liable to have an effect on foreigners more often than on nationals and include the risk of placing them at a particular disadvantage. Therefore, according to settled case law, equality of treatment “prohibits not only overt discrimination based on nationality but all covert forms of discrimination which, by applying other distinguishing criteria, in fact achieve the same result” (Pinna I, para. 23; Celozzi, para. 23). CJEU judgments, finding indirect discrimination within domestic law are numerous and go back to the early 1970 s. They refer to all areas of EU law across-the-board, especially to the free movement of persons (Case C-152/73 (Sotgiu), EU:C:1974:13; Case C-15/69 (Ugliola), EU:C: 1969:46) and services, and, as a result, social benefits as well). Nevertheless, it must be recalled that this case law refers to Art. 3(1) of Reg. No. 1408/71 and that, at the moment, there is no decision related to Art. 4. As yet, we cannot be Bettina Kahil-Wolff

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sure that the Court will apply the new provision to indirect discrimination. In the past, the majority of national rules being recognized as leading to disguised discrimination were related to residence conditions or other requirements of territoriality. According to a German law, an additional insurance period was available only for orphans who had completed their military service under German legislation (Case C-131/96 (Romero), EU:C:1997:317); the Elsen Case concerned a German regulation which required the accomplishment of periods devoted to child-rearing in Germany as well (Case C-135/99 (Elsen), EU:C:2000:647); similar, an Austrian legislation was subject to a Court decision in the Klöppel Case (Case C-507/06 (Klöppel), EU:C:2008:110). The refusal to assimilate military service and education periods in another Member State to periods required by national law was liable to result in unequal treatment of foreigners or, at least, treatment disadvantageous to EU nationals who have exercised their right to move (Elsen, para. 34) and was therefore incompatible with European law. At that time, the Court was required to apply Art. 3 Reg. No. 1408/71 (and use the argument of indirect discrimination) since no express provision required the assimilation of those periods. The Court ruled that Art. 3 Reg. No. 1408/71 could only be interpreted as meaning that Member States are required to assimilate facts accomplished in another Member State (Romero, para. 36). This type of situation is now regulated by Art. 5 and it can be expected that, in the future, the Court will use this written rule instead of indirect discrimination case law. Art. 5 Reg. No. 883/2004 has a broad scope of application since it requires that Member States take into account all facts occurring in any other Member State “as though they had taken place in its own territory”. This procedure means “assimilation” or “aggregation”. It concerns every fact which has legal effects in the field of social security and is not within the scope of Art. 6 and 7 Reg. No. 883/2004 or another lex specialis (for example Art. 21 para. 1 Reg. No. 987/2009 concerning employers who have their registered office or place outside the competent Member State). The consequence will not be very different because Art. 5 Reg. No. 883/2004 allows exceptions in addition to the indirect discrimination case law. It shall be recalled that the Court usually reserves national rules if objectively justified and proportionate to their aim (Colezzi, para. 26). As long as they are motivated by overriding considerations, Member State regulations may result in a different treatment; this principle is now laid down in the preamble of Reg. No. 883/2004, para. 12: “In the light of proportionality, care should be taken to ensure that the principle of assimilation of facts or events does not lead to objectively unjustified results or to the overlapping of benefits of the same kind for the same period”. It is difficult to predict whether the application of Art. 5 will lead to more flexibility for Member States and what kind of reasons might justify unequal treatments. Under the rule of Art. 3 Reg. No. 1408/71, however, the cases where the Court has held that a different treatment of non-domestic facts is justified were few, if not inexistent. The conditions established by case law are strict. Member States might indeed adopt rules which

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require that the migrant shows a certain degree of integration; the Court uses the expression “degree of connection to society” (Case C-192/05 (Tas-Hagen), EU:C:2006:676, para. 36) and admits that “the aim of solidarity may constitute an objective consideration of public interest” (Case Tas-Hagen, para. 35). Conditions of residence, however, usually fail to comply with the principle of proportionality (Tas-Hagen, para. 39); they are not an appropriate mean by which to obtain the objective of solidarity if the person who has his residence in another Member State is in fact as well integrated as a resident (Tas-Hagen, para. 37 and 38). The most important factor proving this integration is the accomplishment of a gainful activity; however, there can also be other points, for example, that the person have worked in the country but is currently on sick leave or retired. To answer the question whether an unequal treatment is justified, the Court takes into account the circumstances of each individual case. In the Borawitz decision, the refusal of a German disability pension payment to persons living in another Member State was motivated by the fact that the payment abroad is more expensive than a payment made in Germany (Case C-124/99 (Borawitz), EU:C: 2000:485). The Court rejected this explanation because a clearing system was available and this system, in fact, did not generate any additional expenses. Moreover, several Court decisions did not evoke at all the possibility that the refusal to take into account external events might be justified (Elsen, Klöppel); the Court found a violation of EU law without discussing any overriding consideration. In the Mulders Case, the Court of Justice held that a Member State cannot preclude, as a period of insurance, an entire period during which contributions were paid for the sole reason that the person concerned did not reside in that Member State during this period (Case C-548/11 (Mulders), EU:C:2013:249, para. 47). e) Restrictions of free movement of persons without discrimination

Persons who have exercised their freedom to move and to reside in other 9 Member States suffer disadvantages by some national legislation but it is not possible to establish discrimination, neither directly nor indirectly (without discriminating against them on the grounds of nationality directly or indirectly). They include no reference to nationality and they do not predominantly affect foreigners. For example, according to a provision of Dutch law, a person who had paid taxes throughout the year was submitted to lower social contributions than individuals who, for a certain period of time, were taxable in another Member State; this happened to Mr. Terhoeve, a Dutch national who had lived and worked in the United Kingdom for six months at the request of his employer established in the Netherlands (Case C-18/95 (Terhoeve), EU:C:1999:22). Furthermore, in the De Cuyper Case (Case C-406/04 (De Cuyper), EU:C:2006:491) a Belgian law concerning an unemployment allowance required residency of every person entitled to the allowance in order to monitor compliance with the statutory requirements. Pursuant to this law, the allowance was refused to a BelBettina Kahil-Wolff

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gian unemployed person who lived in France (De Cuyper). According to settled case law, such rules constitute restrictions on the freedoms conferred by the Treaty and therefore are in principle prohibited. Sometimes, when the Court detects an obstacle to freedom of movement prohibited by the Treaty, it considers it unnecessary to verify whether the national measure also constitutes an indirect discrimination on the grounds of nationality (Case C-18/95 (Terhoeve), EU:C: 1999:22, para. 41). Restrictions can be justified, under EU law, “only if (they are) based on objective considerations independent of the nationality of the persons concerned and (are) proportionate to the legitimate objective of the national provisions (Case C-406/04 (De Cuyper), EU:C:2006:491, para. 40). Therefore, the rule must be “appropriate for securing the attainment of the objective pursued” and it must not “go beyond what is necessary in order to attain it” (De Cuyper, para. 42). This case law applies less often to social security questions than to those concerning disguised discrimination. In addition to the De Cuyper Case in which the reasons justifying the restriction were approved be the Court (para. 48: the monitoring was considered useful and necessary; see also CJEU, Case C-228/07 (Petersen), EU:C:2008:494 where the justification of a residence requirement was denied by the Court), one should mention the more recent Stewart Case concerning a British subject to whom a disability allowance was refused, for the sole reason that she was not present in Great Britain on the date on which she claimed the allowance (Case C-503/09 (Stewart), EU:C:2011:500). The Court holds that this restriction could not be described as appropriate; it neither ensured a genuine link between the claimant and Great Britain nor was it necessary to preserve the financial balance of the British social security system (Stewart, para. 108). In the field of social security, the case law concerning nondiscriminatory restrictions on freedom of movement is subordinate to Art. 4 Reg. No. 883/2004. f) The persons to whom the Regulation applies 10

Equality of treatment within the meaning of Art. 4 is due to all persons “to whom the Regulation applies” (see Art. 2 Reg. No. 883/2004). In contrast to Art. 3 Reg. No. 1408/71, the new rule does not necessarily require that the entitled person has to be a resident of a Member State. Art. 4 Reg. No. 883/2004 is available to all “persons to whom this regulation applies”. The wording “persons resident in the territory of one of the Member States” included in the former Art. 3 (1) Reg. No. 1408/71 was deleted without substitution. Therefore, one can appeal to equality of treatment even when living in a third country (and not living in a Member State) for example in the United States (Case C-331/06 (Chuck), EU:C:2008:188, para. 34). Stateless persons, refugees and foreigners from third countries, however, must reside in a Member State if they want to claim application of Reg. No. 883/2004 (Art. 2). A person who is not economically active and claims “special non-contributory cash benefits” within the meaning of Art. 70 Reg. No. 883/2004 can be made subject to the requirement 110

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that he fulfil the conditions for obtaining a right of residence under Directive 2004/38 (Case C-333/13 (Dano), EU:C:2014: 2358, para. 83). According to the general principle of European law, Art. 4 Reg. No. 883/2004 11 applies exclusively to individuals who want to make, or have made, use of the free movement of persons inside the European Union (similar to this Art. 21 (2) EU Charter of Fundamental Rights). It requires a trans-border situation and is not applicable to domestic cases, thus situations “which are confined in all respects within a single Member State” (Case C-153/91 (Petit), EU:C:1992:354: Mr. Petit, a Belgian national had worked solely in Belgium; also see joined Cases C-95/99 to C-98/99 and C-180/99 (Khalil), EU:C:2001:532, para. 10, para. 70). As a consequence, European law does not prohibit the so-called reverse discrimination – a situation in which persons who do not fall within the scope of the Treaties have fewer rights than persons who do. To establish that there is a trans-border situation, the Court takes into account various facts, such as commercial relationships with persons in another Member state (Case C-60/00 (Carpenter), EU:C:2002:434). It is not necessary that an individual literally move from one Member State to another. A condition of residency in a federated entity of a Member State limiting affiliation to a social security scheme is contrary to the free movement of persons “in so far as such a limitation affects nationals of other Member States or nationals of the Member State concerned who have made use of their right of freedom of movement” (Case C-212/06 (Gouvernement de la Communauté française et Gouvernement wallon / Gouvernement flamand), EU:C:2008:178). A claim under Art. 4 can also be made by persons who require equal rights towards the Member State of which they are nationals (Case C-503/09 (Stewart), EU:C:2011:500). The rule is not focused on workers and self-employed persons alone; it protects family members as well, especially the children of migrant workers who have a legally protected right to social security benefits, for example in the event of disability or other health issues. Family members are entitled to ask for equal treatment whether or not their legal position derives from the worker’s rights. For example, the legislation of a Member state covers every person individually instead of including the family under the worker’s social security coverage. In such a case, the family member may invoke Art. 4 (Case C-286/03 (Hosse), EU:C:2006:125, para. 53; Case C-503/09 (Stewart), EU:C:2011:500). The family member may, of course, also do so if his or her right to receive social benefits derives from the legal position of the working parent(s) (Case C-63/76 (Inzirillo), EU:C:1976:192). g) Enjoying the same benefits and being subject to the same obligations

As shown above, equality of treatment means that national legislation must be 12 applied regardless of nationality concerning access to social security coverage (Case C-548/11 (Mulders), EU:C:2013:249), entitlement to benefits, (Case C-399/09 (Landtová), EU:C:2011:415 concerning old age benefits Case C-63/76 (Inzirillo), EU:C:1976:192 concerning disability allowance) and the calculation Bettina Kahil-Wolff

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of social security contributions (Case C-18/95 (Terhoeve), EU:C:1999:22). If the law of a Member State gives legally protected rights to nationals, the same rights automatically apply to individuals of other Member States (Case C-63/76 (Inzirillo), EU:C:1976:192, para. 22). This results from primacy and the direct effect of EU law (Case C-18/95 (Terhoeve), EU:C:1999:22, para. 55 to 57). National courts are bound to apply European law and, where necessary, must not apply any provisions of national law which may conflict with it (Case C-18/95 (Terhoeve), EU:C:1999:22, para. 65). This, of course, includes subsequent acts, since it follows from settled case law that European law cannot “be called in question by subsequent legislative acts of the signatories” (Case C-6/64 (Costa/ENEL), EU:C:1964:66, para. 594); it also prevails over highly ranked domestic law such as constitutional rules (Case 106/77 (Simmenthal II), EU:C:1978:49) and other fundamental principles (Case 213/89 (Factortime), EU:C:1990:257). It is the best way to grant equality of treatment, especially “as long as measures reinstating equal treatment have not been adopted” (Case C-18/95 (Terhoeve), EU:C: 1999:22, para. 57 and the case law cited). Hence, the same solution is used against other discriminatory rules, those for example installing unequal treatments of men and women (in Case C-18/95 (Terhoeve), EU:C:1999:22, para. 57, the Courts refer to case law concerning Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security, OJ 1979 L 6, p. 24). If a discriminatory rule in an EU legislative act is later invalidated by the Court, the unequal treatment is also ipso facto prohibited (Case 359/87 (Pinna II), EU:C:1989:107, para.17). III. Equality of treatment according to EU anti-discrimination law 1. Spirit and purpose 13

As previously mentioned, equality of treatment is a fundamental rule of EU law and hence must be observed in every field covered by the Treaties: free movement of persons, goods and services, agriculture and fishery, competition and antitrust law etc. In the area of social security, free movement of persons, especially Reg. No. 883/2004 and Reg. No. 987/2009, play a major role. There are also, however, some other parts of EU law which have a growing impact on Member State’s systems such as pension schemes and health care. In addition to several particular rules (concerning for example EU agents, farmers or persons without European citizenship), one must mention the following EU Directives: – Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) [OJ L 204, 26.7.2006, p. 23]; – Directive 2010/41/EU of the European Parliament and of the Council of 7 July 2010 on the application of the principle of equal treatment between

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–

–

–

–

men and women engaged in an activity in a self-employed capacity and repealing Council Directive 86/613/EEC [OJ L 180, 15.7.2010, p. 1]; Directive 79/7 EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security [OJ L 6/22, 10.01.1979, p. 23]; Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation [OJ L 303/43, 2.12.2000, p. 16]; Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin [OJ L 180/43, 19.7.2000, p. 22]; Council Directive 2004/113/EC of 13 December 2004 implementing the principle of equal treatment between men and women in the access to and supply of goods and services [OJ L 373/47, 21.12.2004, p. 37].

The Directives and the CJEU case law establish broad anti-discrimination law 14 protecting people against gender and age discrimination, unequal treatment related to religion or belief, sexual orientation, race, ethnic origin, disability and more. The principles developed in this area are similar to those applying to Art. 4 Reg. No. 883/2004. They do not allow putting persons with particular distinctive features at a particular disadvantage, prohibit overt as well as indirect discrimination (Case C-124/99 (Borawitz), EU:C:2000:485) and determine the legal consequences of discrimination (Case C-18/95 (Terhoeve), EU:C:1999:22; Case C-149/77 (Defrenne II), EU:C:1978:130). The foregoing notwithstanding, measures taken by the Member States must be justified by a prevailing public interest (public security, protection of health, employment policy etc.); and the means of achieving the aim must be proportionate (“appropriate and necessary”, Case C-555/07 (Kücükdeveci), EU:C:2010:21, para. 37). As in other areas of EU law, Member States bear the burden of proof that a measure is justified and it is for the national Courts to verify whether the national provisions are consistent with the aims pursued (Case C-388/07 (Age Concern England), EU:C: 2009:128). EU anti-discrimination law however interferes more with national labour law; most of the Court decisions related to EU anti-discrimination law deal with cases concerning the relationship between employees and employers (public and private employers), especially pay, including contractual pension schemes, access to employment, training, promotion, work conditions and dismissals. In the field of social security, according to the specific Directive 79/7/ EEC, Member States may exclude from the scope of equal treatment important issues such as pensionable age and survivor pensions (Art. 7 Directive 79/7/ EEC). The general Directives (2000/78, 2006/54, 2010/41) do not apply to social security and case law is scarcer than case law referring to employment issues. EU anti-discrimination law goes back to early cases, especially to Court deci- 15 sion 43/75 (Defrenne II) which established the right of equal pay for male and Bettina Kahil-Wolff

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female workers. The Defrenne II Case is significant because it set out the main principles of EU anti-discrimination law: equal pay forms part of the “foundations” of the European Union (Case C-43/75 (Defrenne II), EU:C:1976:56, para. 12); it shows that European integration attempts to avoid competitive disadvantages for Member States which have implemented the principle (Case C-43/75 (Defrenne II), EU:C:1976:56, para. 9) and forms part of the social objectives laid down in the Treaties (Case C-43/75 (Defrenne II), EU:C:1976:56, para. 10); the Treaty provision granting equal pay (Art. 143 TFEU = ex-Art. 119 EC) is “directly applicable” and gives “rise to individual rights which the courts must protect” (para. 24); it applies directly to employees and private employers (para. 39), whenever men and women receive unequal pay for equal work carried out in the same establishment or service, whether public or private” (para. 22); it also gives the right to claim a higher wage from the moment discrimination has been established by the Court (para. 74 and 75: “considerations of legal certainty make it impossible in principle to reopen the question” of equal pay “as regards the past”). The Defrenne II decision also confirmed what the Court had already held in 1968 (Case C-28/66 (Pays-Bas/Haute autorité de la CECA), EU:C: 1968:5), i.e. that the social aims of the Treaties are no less important than economic aims (para. 10). The following case law has enunciated further maxims: equal pay is considered to form a fundamental right within the legal framework of the European Union (Case 149/77 (Defrenne III), EU:C:1978:130, para. 27); it is binding for Member States and for the EU (Case C-117/82 (Razzouk/ Commission), EU:C:1984:116; Case C-227/04 P (Lindorfer), EU:C:2007:490). The concept of pay has a broad meaning and includes all benefits granted to the employee such as occupational pension schemes (Case C-170/84 (BilkaKaufhaus), EU:C:1986:204; Case C-262/88 (Barber), EU:C:1990:209) including benefits paid to survivors (Case C-109/91 (Ten Oever), EU:C:1993:833, para. 12 and 13); a difference in pay between full-time and part-time workers may represent an indirect means of discrimination if the group of part-time workers is composed ”exclusively or predominantly of women” (Case C-96/80 (Jenkins), EU:C:1981:80, para. 15; also cf. Case C-69/80 (Worringham), EU:C:1981:63); unequal treatment based on pregnancy “constitutes direct discrimination” (Case C-177/88 (Dekker), EU:C:1990:383, para. 13; also cf. to Case C-179/88 (Hertz), EU:C:1990:384; Case C-109/00 (Tele Danmark), EU:C:2001:513; Case C-400/95 (Larsson), EU:C:1997:259); the Member States must make certain that anti-discrimination law is sufficiently effective, especially by giving the victim of discrimination adequate financial compensation (Case C-14/83 (Von Colson and Kamann), EU:C:1984:153, para. 18; also cf. to Case C-271/91 (Marschall), EU:C:1993:335) and by lightening the burden of proof (Case C-109/88 (Danfoss), EU:C:1989:383; Case C-104/10 (Kelly), EU:C:2011:506). Concerning access to information about other applicants, the Court has held that a worker whose application was rejected is not entitled to have access to information indicating whether the employer engaged another applicant (Case C-415/10 (Meis-

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ter), EU:C:2012:217). Furthermore, Member State legislation must not stand for the principle that night work by women is prohibited where night work for men is not (Case C-345/89 (Stoeckel), EU:C:1991:324). This case law has been codified by Directive 2006/54/EC (matters of employment and occupation/recast). For self-employed persons, reference should be made to Directive 2010/41/EU. This Directive is complementary to Directives 2006/54/EC and 79/7/EEC. It prohibits discrimination in the public and private sector and contains rules about positive actions, establishment of companies between spouses, social protection, maternity benefits, defence of rights and so on. In social security matters, the power of the Member States is broader. Directive 79/7/EEC of 19 December 1978 only intends to ensure the “progressive implementation” of equal treatment of men and women in the field of social security and does not deny the power of the Member States to “define their social policy” (De Weerd born Roks et al., para. 27 and 28 – for more details see below). In European law, equal treatment of men and women also bears upon private insurance premiums and benefits (a provision in Directive 2004/113/EC which allowed the Member States not to apply the rule of unisex premium) was invalidated by the Court in 2011 (Case C-236/09 (ASBL), EU:C:2011:100). Another significant step was taken by the Mangold Case where the Court first 16 stated that the “principle of non-discrimination on grounds of age must thus be regarded as a general principle of Community law” (Case C-144/04 (Mangold), EU:C:2005:709, para. 75). Later decisions have brought more details and explained the framework left to the Member States. There may be situations in which a person is treated less favourably than another person in a comparable situation; such situations do not constitute discrimination prohibited under European law if the differences are “objectively and reasonably justified by a legitimate aim” (Case C-411/05 (Palacios de la Villa), EU:C:2007:604, para. 50 and 52). National employment policy, especially the aim to create opportunities on the labour market for persons seeking employment (Case C-411/05 (Palacios de la Villa), EU:C:2007:604, para. 58; also see Art. 6 Directive 2000/78) or to create a balanced age structure in order to encourage the recruitment and promotion of young people (Case C-159/10 and Case C-160/10 (Fuchs and Köhler), EU:C: 2011:508, para. 75), as well as safety reasons, such as air traffic security, may justify maximum age limits (Case C-447/09 (Prigge), EU:C:2011:573). Likewise, Member States may also introduce minimum age limits (Case C-555/07 (Kücükdeveci), EU:C:2010:21). Nonetheless, exceptions to the principle of nondiscrimination must be interpreted strictly (Case C-447/09 (Prigge), EU:C: 2011:573, para. 72 and 75: a collective agreement clause automatically terminating employment contracts of airline pilots at age 60 is disproportionate). In the field of health and sickness insurance the Member States still have the power to adopt provisions “intended to govern the organization and delivery of health services and medical care” but a maximum age limit of 68 applying to panel dentists is not justified if it appears that no-panel dentists need not observe this age Bettina Kahil-Wolff

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limit; such a rule is not “consistent” and therefore not justified (Case C-341/08 (Petersen), EU:C:2010:4). According to Member State law, employment contracts often automatically end as soon as a worker reaches the legally defined pension age; such stipulations can be explained by the necessity of having a balance between political, economic, social and demographic considerations (Case C-45/09 (Rosenbladt), EU:C:2010:601, para. 44). They are justified even if the contract ends regardless of the level the retirement pension attains (Case C-141/11 (Hörnfeldt), EU:C:2012:421, para. 47). A maximum age of 30 for recruitment in a fire service does not go beyond what is necessary to achieve the aim of operational capacity and proper functioning of a professional fire service (Case C-229/08 (Wolf), EU:C:2010:3). 17 A few judgments concerning discrimination other than age discrimination may be mentioned in the present context. As mentioned above, Directive 2000/78 does not apply to payments made by state social security schemes (Art. 3 para. 3 Directive 2000/78) but it includes occupational pension schemes because such schemes are treated as equivalent to “pay” within the meaning of Art. 154 TFEU (Case C-267/06 (Maruko), EU:C:2008:179, para. 42, concerning survivor’s benefits granted under an occupational pension scheme; also see Case C-152/11 (Odar), EU:C:2012:772 concerning an “occupational social security scheme”). A pension scheme favouring married recipients over those living in a registered partnership constitutes a discrimination based on sexual orientation if the Member State concerned allows registered partnerships and its legislation provides for assimilation of a registered partnership to a marriage (Case C-147/08 (Römer), EU:C:2011:286). In terms of discrimination on the grounds of disability, the Court has held that Directive 2000/78/EC applies to the dismissal of an employee who is not himself disabled but who is the parent of a disabled child (Case C-303/06 (Coleman), EU:C:2008:415). Disability within the meaning of Directive 2000/78/EC includes a “condition caused by illness medically diagnosed as curable or incurable where that illness entails a limitation which results in particular from physical, mental or psychological impairments which in interaction with various barriers may hinder the full and effective participation of the person concerned in professional life on an equal basis with other workers, and the limitation is a long-term one (Case C-335/11 and C-337/11 (HK Danmark), EU:C:2013:222). An employer who publicly states that he will not recruit employees of a certain ethnic or racial origin commits direct discrimination within the scope of Directive 2000/43/EC (Case C-54/07 (Frima Feryn NV), EU:C:2008:397). 2. Directive 79/7 18

Directive 79/7/EEC on the progressive implementation of the principle of equal treatment for men and women in matters of social security is one of the oldest legal acts in the field of non-discrimination; it was adopted on 19 December 1978 and, in spite of several proposals, has never been modified since. The 116

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Directive applies to statutory schemes which provide protection against the risks of sickness, invalidity, old age, accidents at work and occupational diseases, or unemployment (Art. 3 Directive 79/7/EEC). Benefits provided by those schemes do not fall within the scope of Art. 157 TFEU. According to the very first Defrenne judgment from May 1971, the concept of pay does not include social security benefits (Case 80/70 (Defrenne I), EU:C:1971:55). For situations involving discrimination resulting from the application of social security law, such as retirement pension schemes directly governed by legislation, “without any element of agreement within the undertaking or the occupational branch concerned”, Directive 79/7/EEC is the relevant legal act. The delimitation between pay (including forms of pay in case of sickness, retirement, disability etc.) and social security benefits is not always easy. It depends on whether the benefit in question is “to be received from the redundant worker’s last employer and that it is payable by reason of the employment relationship which existed between those two persons” (Case C-173/91 (Commission/Belgium), EU:C:1993:64, para. 16). Directive 79/7/EEC also applies to social assistance in so far as it is intended to supplement or replace social security schemes (Art. 3); such a supplement or replacement must be directly and effectively linked to the protection provided against one of the risks specified in Art. 3” (Case C-243/90 (Smithson), EU:C:1992:54, para. 14; see also Case C-150/85 (Drake), EU:C:1986:257, para. 21). A supplementary allowance or income support, for example, which is granted to persons whose means are insufficient to meet their needs, does not fall within the scope of Directive 79/7/EEC (joined Cases C-63/91 and C-64/91 (Jackson and Cresswell), EU:C:1992:329). Nor does Directive 79/7/EEC apply to a national law under which concessionary fares on public passenger transport services are granted to certain classes of persons, including certain elderly persons (Case C-228/94 (Atkins), EU:C:1996:288, para. 31). On the other hand, a national rule exempting women but not men in the same age bracket from paying charges for the supply of drugs, medicines and appliances falls within the scope of the Directive (Case C-137/94 (Richardson), EU:C:1995:342, para. 14). Directive 79/7/EEC applies to the working population solely (Art. 2), including self-employed persons, workers and persons whose activity is interrupted by illness, accident or involuntary unemployment as well as persons seeking employment, retired and invalid workers or self-employed persons. The concept includes persons who receive benefits from a statutory invalidity scheme because they are taking care of a disabled person (Case C-150/85 (Drake), EU:C: 1986:257, para. 26). Persons “who have not had an occupation and are not seeking work” or persons “who have had an occupation which was not interrupted by one of the risks referred to in Art. 3 cannot rely on” Directive 79/7/EEC (joined Cases C-48/88 (J. E. G. Achterberg), EU:C:1989:261, para. 13). A person who has undergone a male-female gender reassignment can demand to be treated as a woman (Case C-423/04 (Richards), EU:C:2006:256, para. 38). Unlike in the field of equal pay, where no exception is allowed, Member States may Bettina Kahil-Wolff

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derogate from the principle of equal treatment, especially by prescribing differential pensionable ages for men and women (Art. 7 (1) (a) Directive 79/7). If the national legislation authorizes male and female workers to take retirement at an identical age, the method of calculating the pension must be equal (Case C-154/92 (Cant), EU:C:1993:282). In the field of survivor’s and family benefits, the Directive does not apply (Art. 3 (2) Directive 79/7). 19 Directive 79/7/EEC prohibits direct and indirect discriminations as it concerns, in particular, the scope of the schemes and the conditions of access thereto, the obligation to contribute and the calculation of contributions as well as the calculation of benefits (Art. 4). This provision is “sufficiently precise to be relied upon by an individual before a national court in order to have any national provision not in conformity with that Article declared inapplicable” (Case C-102/88 (Ruzius-Wilbrink), EU:C:1989:639, para. 19). It precludes national legislation, for instance, “which reserves to married women, widows and students the possibility of being assimilated to persons not liable to pay any social security contributions without granting the same possibility of exemption to married men or widowers who for the rest satisfy the same conditions” (Case C-373/89 (Rouvroy), EU:C:1990:414). It also precludes legislation of a Member State which requires a longer contribution period from part-time workers (Case C-385/11 (Elbal Moreno), EU:C:2012:746, para. 38) or withdraws benefits from widows if no withdrawal is applicable to widowers (Case C-337/91 (van Gemert-Derks), EU:C:1993:856). Other cases concern old-age pensions for female frontier workers (Case C-577/08 (Brouwer), EU:C:2010:449), payment of adjustment contributions in a single payment (joined Cases C-231/06 to C-233/06 (Jonkman), EU:C:2007:373) and exceptional increases in pensions (Case C-123/10 (Brachner), EU:C:2011:675). The Court does not always consider that national legislation which affects considerably more women than men is discriminatory on the grounds of gender (see for instance Case C-226/91 (Molenbroek), EU:C:1992:451 and Case C-317/93 (Nolte), EU:C:1995:438). Directive 79/7/EEC was to be brought into force by the Member States within six years of its notification; hence direct effect applies from 1984 on and entitles women and men to have the same rules applied to them (Case C-286/85 (McDermott and Cotter), EU:C:1987:154). Furthermore, a Member State is not allowed to rely on national procedure rules “relating to time-limits for bringing proceedings so long as that Member State has not properly transposed that directive into its domestic legal system” (Case C-208/90 (Emmott), EU:C:1991:333).

Article 5 Equal treatment of benefits, income, facts or events Unless otherwise provided for by this Regulation and in the light of the special implementing provisions laid down, the following shall apply:

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where, under the legislation of the competent Member State,the receipt of social security benefits and other income ha certain legal effects, the relevant provisions of that legislation shall also apply to the receipt of equivalent benefits acquired under the legislation of another Member State or to income acquired in another Member State. (b) where, under the legislation of the competent Member State, legal effects are attributed to the occurrence of certain facts or events, that Member State shall take account of like factor events occurring in any Member State as though they had taken place in its own territory. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. General information on the assimilation of facts . . . . . . . . . . . . . . . . . . . . . 2. The advantageous consideration of foreign benefits and income achieved in other Member States (5(a)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Equal treatment of facts or events that have occurred in another Member State (Art. 5(b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. The relationship to the principle of aggregation laid down in Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Special rules under exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 4 4 8 11 13 15

I. Spirit and Purpose

For the first time Art. 5 lays down in a general form the fundamental principle 1 of assimilation of facts for secondary legislation, thus replacing previous equivalence provisions that had been determined in part in former legislation (e.g. Art. 9 a, 45 (6) Reg. No. 1408/71). This principle is a direct response to the general concerns and the general purpose of the entire coordination legislation, namely that persons who have exercised their right to international or rather European freedom of movement should be treated equally with persons who have been subject to the social legislation of just one Member State. As a consequence of the requirement of the assimilation of facts every Member State when applying and interpreting its own social security legislation must take into account any legal facts or events that have occurred under the legislation of another Member State as if these had occurred under its own legislation or on its own territory, provided like events and facts are concerned. In other words the aim of the principle of the assimilation of facts is not (direct) harmonisation of the social legislation of the Member States, it in fact assumes a system of conflict-oflaw rules for determining the applicable law whose implementation it does not demand due to its special function of assigning regulation competence. Recital No. 11 clarifies this functional limitation and the dogmatic difference between conflict-of-law rules and substantive law in that its states that in no way can the assimilation of facts or events occurring in one Member State render another Member State competent or its legislation applicable. This in no way affects the conflict-of-law rules laid down in Title II concerning determination of the applicable legislations. The laying down of the principle of the assimilation of facts under secondary 2 law did not create this principle anew and does not concern any reversal of preRolf Schuler

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vious provisions (it is in fact a legally positive recapitulative summary of the established case-law of the CJEU). This had gone further than the previous partially defined rules of equivalence by deriving respective assimilation requirements from primary law, in particular the prohibition of direct discrimination on grounds of nationality (Art. 18, 45 (2) TFEU) as well as from the ensuring of freedom of movement and Union citizenship. Recital No. 9 also makes reference in this respect. Some examples of this case-law are the judgments in Cases C-20/85 (Roviello), EU:C:1988:283; C-228/88 (Bronzino), EU:C:1990:85; C-443/93 (Vougioukas), EU:C:1995:394; C-28/00 (Kauer), EU:C:2002:82; C-373/02 (Öztürk), EU:C:2004:232 and C-507/06 (Klöppel), EU:C:2008:110. Art. 5 is therefore based directly on primary law, it reinforces and accomplishes equal treatment and the basis of its interpretation must continue to be the guarantees and the “substance and spirit” (Recital No. 9) of the respective rulings of the CJEU. 3 The principle of the assimilation of facts is the most general principle to the principle of equivalence; it realises not only the legal equality of treatment (Art. 4) but also the de facto equal treatment of persons who have availed themselves of the right of freedom of movement within Europe or the provision of cross-border services within Europe. Special principles in this respect are laid down in Art. 6 (Aggregation of periods) and Art. 7 (Waiving of residence rules), although these have a deviant structure and concern in particular problem areas (in the case of Art. 7 the problem of exporting benefits), which require separate definition. II. Commentary 1. General information on the assimilation of facts

This regulation addresses the competent Member State or rather its competent institution and concerns the application of a Member State’s own respective substantive law. The principle of the assimilation of facts does not apply to the conflict-of-law rules, its application must not lead to the competences laid down in the conflict-of-law rules being changed (cf. Recital No. 11 and para.1 above). It clarifies the practical importance of the dogmatic difference between substantive law and conflict-of-law rules. 5 The principle of the assimilation of facts builds on the facts, events and other criteria of the legislation to be applied and obliges it to take into account like facts that have occurred in other Member States or under the legislation of other Member States. In other words the material scope of national social legislation is thus expanded to include facts in other Member States, in as far as this is not already provided for under national social legislation. The principle therefore results in de facto equal treatment of persons who have availed themselves of the right to freedom of movement under national social legislation, the material scope of which is expanded (no longer territory-dependent). Where legally de4

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termined facts and preliminary issues are concerned this entails not only the taking into account of foreign “local data”, but also the legislation of other Member States having relevance within the application of national legislation. The starting point of the evaluation is the applicable national law (lex fori) as 6 the “rule of decision”. This must first be prepared to take into account specific foreign facts. Should such a fact be interpreted (without discrimination) as a purely national (or even regional) issue, then no further evaluation of an assimilation of facts is necessary. In the case of facts that exist solely on the territory of a Member State, have no cross-border element and otherwise no factor linking them with any situations governed by the coordination Regulation, there is no European relevance that can be construed as a necessary condition for the application of European coordination legislation. Should the interpretation of the internal rules of a Member State already provide for the taking into account of foreign facts, then recourse to Art. 5 is also not necessary. Moreover, the assimilation of facts requires that like or corresponding facts or events are concerned. Where applicable the taking into account of foreign facts therefore requires an evaluative classification, in that the foreign facts must at least be comparable to characteristics of the national issues in their decisive functional aspects. Where social benefits are concerned the CJEU ruled that in order to be classified as such, benefits must be regarded, irrespective of the characteristics peculiar to different national legal systems, as being of the same kind when their purpose and object as well as the basis on which they are calculated and the conditions for granting them are identical (CJEU, Case C-406/04 (De Cuyper), EU:C: 2006:491). This evaluative approach is also indicated in Recital No. 12 which states that in the light of proportionality, care must be taken to ensure that the principle of assimilation of facts or events does not lead to unjustified results or to the overlapping of benefits of the same kind for the same period. Should interpretation of the national legal regulation require that respective 7 foreign facts must be given equal treatment, but no such respective legally determined fact can found in its rules, then where applicable adaptation (incorporation) to national legislation is necessary. This can be effected by means of case law or positive legal regulation. 2. The advantageous consideration of foreign benefits and income achieved in other Member States (5(a))

Art. 5(a) regulates the equal treatment of the receipt of social benefits or other 8 income achieved in other Member States in a general way with regard to all legal effects provided for under national legislation. The regulation of this provision therefore goes further than the previous Art. 12 Reg. No. 1408/71, although this too focussed on the equalisation of advantages, i.e. the prevention of benefit cumulation or the receipt of means-tested benefits despite adequate financial standing. However, the so-called Petroni principle must be taken into consideration here (settled case law of the CJEU since Case 24/75 (Petroni), EU:C: Rolf Schuler

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1975:129) according to which the intention and function of Community coordination regulation is not to lead to a diminution of the rights which the persons concerned already enjoy in a Member State by virtue of the application of the national legislation alone. As a more specific provision Art. 53 et seq. takes priority in the field of the anti-cumulation legislation of statutory pension insurance, in particular the similarity and the different types of overlapping benefits are determined in a legally positive manner in the light of the case law established by the CJEU. 9 Individual cases of older CJEU case law: – Benefits acquired under the legislation of two Member States, which seeks to ensure that an aged person derived of the income of his or her deceased spouse has sufficient means of subsistence must be considered to be benefits of the same kind by reason of their identical purpose (CJEU, Case 238/81 (Van der Bunt-Craig), EU:C:1983:124), – Old age and invalidity pensions are of the same kind pursuant to this Regulation, e.g. an early retirement pension and an invalidity pension (CJEU, Case 128/88 (Di Felice), EU:C:1989:153; Case 108/89 (Pian), EU:C: 1990:167; Case 109/89 (Bianchin), EU:C:1990:168) or an old-age pension and an invalidity pension not yet converted into and old-age pension (CJEU, joined Cases 116, 117, 119-121/80 (Celestre), EU:C:1981:159). – The requirement of benefits being of the same kind is not satisfied in the overlapping of benefits when these are linked to different professional careers and insurance periods, that is the case with the overlapping of an invalidity pension and a survivor’s pension based on the insurance of the recipient’s deceased husband (EuGH, Case 197/85 (Stefanutti), EU:C:1987:422); see also in this respects the judgements in the Cases Case C-98/94 (Schmidt), EU:C:1995:273 and Case C-366/96 (Cordelle), EU:C:1998:57). These principles are now expressly regulated in Art. 53(1) for benefits of the same kind in respect of invalidity, old age and survivors. 10 If income entails a diminution of rights, then obviously income achieved abroad must also be taken into account. Moreover, the anti-simulation regulation of national legislation excludes any unjustified multiple or too high social benefits. 3. Equal treatment of facts or events that have occurred in another Member State (Art. 5(b)) 11

The rule of equal treatment laid down in Art. 5(b) applies to all facts and events whose fulfilment is required by the provisions of the national substantive social legislation. Despite the rule of equal treatment not applying to the conflict-of-law rules and it having no relevance under those rules, so that its scope is limited in insurance legislation, it does in fact apply under certain conditions. As a rule the assimilation of facts must not lead to national insurance being bur-

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dened with foreign periods, for example by equal treatment of facts for substitute periods. Its primary relevance concerns legislation pertaining to benefits. It must be noted that the application of the principle of the assimilation of 12 facts is not intended to harmonise the social legislations of the Member States. The Member States retain their competence and are free to determine the conditions for the entitlement to social benefits. 4. The relationship to the principle of aggregation laid down in Art. 6

If in a Member State the conditions for entitlement to benefits can only be 13 fulfilled by taking into account periods completed in another Member State, does the first Member State then have to apply Article 5 or Article 6? Recital 10 helps us to find the answer. In fact, according to this recital, the principle of treating certain facts or events occurring in the territory of another Member State as if they had taken place in the territory of the Member State whose legislation is applicable should not interfere with the principle of aggregating periods of insurance completed under the legislation of another Member State with those completed under the legislation, of the competent Member State. “Periods completed under the legislation of another Member State should therefore be taken into account solely by applying the principle of aggregation of periods”. This recital is entirely in line with the Court’s judgment in Case C-372/02 (Adanez Vega), EU:C:2004:705 (see Cornelissen: “The new coordination system for workers who become unemployed”, E.J.S.S. 2007, pages 187-219). The principle of the aggregation of periods pursuant to Art. 6 is a lex specialis vis-à-vis the general assimilation of facts; its scope is however limited solely to the aggregation of communicated foreign periods (cf. Decision of the Administrative Commission N. H6 from 16.12.2010, OJ EU C 45/5 from 12.2.2011 and Art. 6(6)). Should national legislation place special conditions on specific periods (so- 14 called qualifying periods), then any periods completed in other Member States are taken into account in accordance with the principle of assimilation of facts pursuant to Art. 5(b), provided these foreign periods have the necessary qualification. Account is also taken of foreign facts in accordance with the general assimilation of facts laid down in Art. 5(b) in the case of conditions for the entitlement to benefits other than those of (qualifying) periods of insurance and residence (see also commentary on Art. 6). 5. Special rules under exceptions

Special overriding rules are laid down in Art. 53-57 concerning the overlap- 15 ping of pensions (in conjunction with Annex IX) and in Art. 40 (3) concerning accidents at work and occupational diseases. Exceptions with regard to the possibility of voluntary insurance or insurance on request are found in Annex IX. Examples are Annex XI, Germany, points 1 and 2 and Greece, points 1 and 2.

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Article 6 Aggregation of periods Unless otherwise provided for by this Regulation, the competent institution of a Member State whose legislation makes: – the acquisition, retention, duration or recovery of the right to benefits, – the coverage by legislation, or – the access to or the exemption from compulsory, optional continued or voluntary insurance, conditional upon the completion of periods of insurance, employment, self-employment or residence shall, to the extent necessary, take into account periods of insurance, employment, selfemployment or residence completed under the legislation of any other Member State as though they were periods completed under the legislation which it applies. Article 12 Reg. No. 987/2009 Aggregation of periods (1) For the purposes of applying Article 6 of the basic Regulation, the competent institution shall contact the institutions of the Member States to whose legislation the person concerned has also been subject in order to determine all the periods completed under their legislation. (2) The respective periods of insurance, employment, self-employment or residence completed under the legislation of a Member State shall be added to those completed under the legislation of any other Member State, insofar as necessary for the purposes of applying Article 6 of the basic Regulation, provided that these periods do not overlap. (3) Where a period of insurance or residence which is completed in accordance with compulsory insurance under the legislation of a Member State coincides with a period of insurance completed on the basis of voluntary insurance or continued optional insurance under the legislation of another Member State, only the period completed on the basis of compulsory insurance shall be taken into account. (4) Where a period of insurance or residence other than an equivalent period completed under the legislation of a Member State coincides with an equivalent period on the basis of the legislation of another Member State, only the period other than an equivalent period shall be taken into account. (5) 1Any period regarded as equivalent under the legislation of two or more Member States shall be taken into account only by the institution of the Member State to whose legislation the person concerned was last compulsorily subject before that period. In the event that the person concerned was not compulsorily subject to the legislation of a Member State before that period, the latter shall be taken into account by the institution of the Member State to whose legislation the person concerned was compulsorily subject for the first time after that period. (6) In the event that the time in which certain periods of insurance or residence were completed under the legislation of a Member State cannot be determined precisely, it shall be presumed that these periods do not overlap with periods of insurance or residence completed under the legislation of another Member State, and account shall be taken thereof, where advantageous to the person concerned, insofar as they can reasonably be taken into consideration. Article 13 Reg. No. 987/2009 Rules for conversion of periods (1) Where periods completed under the legislation of a Member State are expressed in units different from those provided for by the legislation of another Member State, the conversion needed for the purpose of aggregation under Article 6 of the basic Regulation shall be carried out under the following rules: 1. the period to be used as the basis for the conversion shall be that communicated by the institution of the Member State under whose legislation the period was completed. 2. in the case of schemes where the periods are expressed in days the conversion from days to other units, and vice versa, as well as between different schemes based on days shall be calculated according to the following table: Scheme based on

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1 day corresponds to

1 week corresponds to

1 month corresponds to

1 quarter corresponds to

maximum of days in one calendar year

5 days

9 hours

5 days

22 days

66 days

264 days

6 days

8 hours

6 days

26 days

78 days

312 days

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1 day corresponds to

1 week corresponds to

1 month corresponds to

1 quarter corresponds to

maximum of days in one calendar year

7 days

6 hours

7 days

30 days

90 days

360 days

3. in the case of schemes where the periods are expressed in units other than days, i) three months or 13 weeks shall be equivalent to one quarter, and vice versa; ii) one year shall be equivalent to four quarters, 12 months or 52 weeks, and vice versa; iii) for the conversion of weeks into months, and vice versa, weeks and months shall be converted into days in accordance with the conversion rules for the schemes based on six days in the table in point b. 4. in the case of periods expressed in fractions, those figures shall be converted into the next smaller integer unit applying the rules laid down in points b and c. Fractions of years shall be converted into months unless the scheme involved is based on quarters. 5. if the conversion under this paragraph results in a fraction of a unit, the next higher integer unit shall be taken as the result of the conversion under this paragraph. (2) The application of paragraph 1 shall not have the effect of producing, for the total sum of the periods completed during one calendar year, a total exceeding the number of days indicated in the last column in the table in paragraph 1(b), 52 weeks, 12 months or four quarters. If the periods to be converted correspond to the maximum annual amount of periods under the legislation of the Member State in which they have been completed, the application of paragraph 1 shall not result within one calendar year in periods that are shorter than the possible maximum annual amount of periods provided under the legislation concerned. (3) The conversion shall be carried out either in one single operation covering all those periods which were communicated as an aggregate, or for each year, if the periods were communicated on a year-by-year basis. (4) Where an institution communicates periods expressed in days, it shall at the same time indicate whether the scheme it administers is based on five days, six days or seven days.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Scope of application of the aggregation requirement . . . . . . . . . . . . . . . . 2. Aggregation of periods as qualification and retention of entitlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Taking into account periods completed in other Member States for the assessment of compulsory insurance and entitlement to insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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The provision was introduced with Reg. No. 883/2004 and is an overall regu- 1 lation of the taking into account of periods of insurance, employment and residence previously treated individually in the different benefit areas (Art. 9, 10 a, 18, 45, 64 and 72 Reg. No. 1408/71). The requirement of aggregation is laid down in Art. 48 TFEU. It prevents periods relevant for the acquisition or retention of entitlement to benefits being lost (CJEU, Case 232/82 (Baccini), EU:C: 1983:583; Case C-481/93 (Moscato), EU:C:1995:3525; Case C-306/03 (Alonso), EU:C:2005:705). Although the taking into account of periods completed in other Member States is a subcase of the general equal treatment provisions of Art. 5, it has a special structure that is the subject of Recital No. 10. In as far as the Aggregation (totalizing) of periods is concerned, Art. 6, as the more specific provision, is to be given priority over Art. 5. With its Decision H6 from 16.12.2010 the Administrative Commission for the Coordination Social Security Systems harmonised, expanded and differentiated the principle of aggregation

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from the more general assimilation of facts for the legal practice in the Member States (see para. 6, 13). Unless otherwise provided for by deviating provisions, the principle applies for the entire material scope of the Regulation. The aggregation of periods must be applied even if the place of residence is moved to a non-Member State (cf. CJEU, Case C-331/06 (Chuck), EU:C:2008:188 for former regulation of Art. 48 (2) Reg. No. 1408/71, nothing else can apply for Art. 6). 2 Aggregation of periods is necessary under coordination law, because the legislation of the Member States regularly takes into consideration only those periods completed under their own legislation where qualifying time or insurance requirements are concerned. 3 The principle of aggregation is the prototype of the principle of equivalence under international or rather European law that ensures the equal treatment under substantive law of persons who have availed themselves of their right to freedom of movement. It underpins the freedom of movement rights guaranteed under Union law and is thus committed to international justice in social law (cf. also in general Eichenhofer, Internationales Sozialrecht und Internationales Privatrecht, 1987, p. 247 et seq.; Schuler, Das internationale Sozialrecht der Bundesrepublik, p. 198 et seq.). II. Commentary 1. Scope of application of the aggregation requirement

The broad definition of insurance periods in Art. 1 (t) encompasses periods of contribution, employment and self-employment and all periods treated as such by the legislation of the Member State under which they were completed or considered as completed (CJEU, Case C-29/88 (Schmitt), EU:C:1989:61; Case 388/87 (Warmerdam-Steggerda), EU:C:1989:196). When examining the conditions for entitlement the institution undertaking the aggregation must add all the relevant periods communicated to it by the foreign competent institutions (binding) to the national periods. The legislations under which the periods were completed and determined and recognised are decisive here, as the Member States are responsible for determining the type and scope of the conditions for the social benefits under insurance law (CJEU, Case C-306/03 (Alonso), EU:C: 2005:44; Case C-227/03 (Pommeren-Bourgondien), EU:C:2005:431). Consideration must be undertaken without regard to the effect these periods have under foreign legislation, this may also concern periods applicable solely for the calculation of a pension (see para. 6 below). Art. 6 also applies for third-country nationals, provided these meet the conditions laid down in Reg. No. 1231/2010. 5 It follows from its wording that the requirement of aggregation applies only to periods completed under the legislation of one or more other Member States, it does not apply to periods completed in a non-Member country, even if one of the other Member States is obliged to take such periods into account (e.g. due to 4

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a social security convention) (CJEU, Case C-297/92 (Baglieri), EU:C:1993:849; Case C-247/00 (Barriera Pérez), EU:C:2002:). So there is in fact no so-called multinational aggregation of periods from the convention countries of other Member States unless the (respective) national legislation requires that periods in convention countries are to be taken into account in addition to periods in other Member States of the EU. The principle of equal treatment therefore requires aggregation of periods completed in a convention country (by the institution undertaking the aggregation in the example of Canada) in favour of nationals of other Member States not subject to convention legislation (CJEU, Case C-55/00 (Gottardo), EU:C:2002:16). With its Decision H6 from 16.12.2010 the Administrative Commission for the 6 Coordination the Social Security Systems stipulated that since 1.4.2011 all insurance periods, including periods treated as equivalent to insurance periods under national legislation, fulfil the notion of ‘periods of insurance’ for the purposes of applying the Reg. (No. 1 of the Decision). However, these periods should be taken into account solely by applying the principle of aggregation of periods as laid down in Art. 6 of the Reg. and 12 of the Implementing Regulation. The principle of aggregation requires that periods communicated by other Member States shall be aggregated without questioning their quality, No. 2 of the Decision). These communications are binding (see CJEU, Case C-372/02 (Adanez-Vega), EU:C: 2004:705). Unless otherwise provided for by deviating provisions in the Regulation, the 7 principle of the aggregation of periods applies to all branches of social security or rather to all benefits that fall under the material scope of the Regulation (Art. 3). It does not apply to claims to pre-retirement benefits (see Art. 66). With regard to the specific aggregation of periods, Art. 12 of Implementing 8 Reg. No. 987/2009 stipulates: Periods completed under the legislation of another Member State shall not be taken into consideration if these overlap (with other foreign periods or with a period to be aggregated under national legislation) (Art. 12 (2) Implementing Reg.). Whereby compulsory insurance periods take priority over voluntary (continued) insurance periods; original periods of insurance or residence take priority over equivalent periods (Art. 12 (3)(4) Implementing Reg.). Any period regarded as equivalent under the legislation of two or more Member States shall be taken into account only by the institution of the Member State to whose legislation the person concerned was last compulsorily subject before that period or, where applicable, the institution of the Member State to whose legislation the person concerned was compulsorily subject for the first time after that period (Art. 12 (5) Implementing Reg.). In the event that the time in which certain periods of insurance or residence were completed cannot be determined, it shall be presumed that these periods do not overlap with periods of insurance or residence completed under the legislation of another Member State. They are to be taken into account pursuant to the principle of favourability “insofar as they can Rolf Schuler

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reasonably be taken into account for this purpose (Art. 12 (6) Implementing Regulation). Even if the wording of these conditions is rather vague, since Decision No. H6 from 16.12.2010 of the Administrative Commission for the Coordination the Social Security Systems there is no longer any scope for questioning the proof or plausibility of these periods. The method for converting the different units of periods is laid down in Art. 13 Reg. No. 987/2009. 2. Aggregation of periods as qualification and retention of entitlement 9

The principle of the aggregation of periods obliges the institutions, when examining the conditions for entitlement, to aggregate periods completed under the legislation of other Member States and any other periods with the national periods “to the extent necessary”, i.e. insofar these are not already fulfilled under national insurance legislation. The principle of aggregation does not suffice for an entitlement to a benefit, nor does it include a general requirement for the equal treatment of (other) conditions for entitlement (CJEU, Case C-29/88 (Schmitt), EU:C:1989:581; Case 388/87 (Warmerdam-Steggerda), EU:C:1989:196), now laid down in Art. 5. Point No. 3 of Decision No. H6 of the Administrative Commission (para. 6) clearly explains the differentiation between the principle of aggregation and the general principle of the assimilation of facts laid down in Art. 5. 3. Taking into account periods completed in other Member States for the assessment of compulsory insurance and entitlement to insurance

Art. 6 requires the consideration of foreign periods and periods of self-employment within the scope of prior insurance and eligibility periods under national provisions for voluntary insurance and now also expressly for access to or exemption from compulsory insurance. This equal treatment of foreign periods ensures that those concerned can fulfil access or exemption barriers in the form of minimum insurance periods taking into consideration all aspects that fall under the scope of coordinating Union legislation (CJEU, Case 368/87 (HartmannTroiani), EU:C:1989:206). 11 Qualifying insurance periods can be fulfilled solely with foreign periods of residence or insurance. Art. 14 is to be observed for access to national voluntary insurance. Pursuant to para. 3 of this provision voluntary insurance in a pension insurance is expressly possible alongside an existing compulsory insurance in another Member State, provided the person desiring the insurance had already once been subject to the legislation of the Member State of the voluntary insurance “due to or as a consequence of employment or self-employment”. The requirement of former insurance affiliation (see also para. 4 and para. 10 below) excludes the choice of and affiliation in a voluntary insurance in the social security schemes of the Member States and virtually limits this choice to optional continued insurance. 10

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All conditions other than temporal ones, whose determination is the responsi- 12 bility of the respective Member State (CJEU, Case C-297/92 (Baglieri), EU:C: 1993:849), must now be assessed in compliance with Art. 5(b). Pursuant to Art. 14 (4) this equal treatment of facts also requires former insurance affiliation under voluntary (optional continued) insurance legislation.

Article 7 Waiving of residence rules Unless otherwise provided for by this Regulation, cash benefits payable under the legislation of one or more Member States or under this Regulation shall not be subject to any reduction, amendment, suspension, withdrawal or confiscation on account of the fact that the beneficiary or the members of his/her family reside in a Member State other than that in which the institution responsible for providing benefits is situated. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Waiving of the residence rules and other territorial conditions for benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Spatial and personal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Art. 7 realises the coordination task of Art. 48 TFEU, whereby payment of 1 benefits to which entitlement has been gained based on the social security scheme of one or more Member States must also be granted to a beneficiary living in the territory of another Member State. For the term place of residence see Art. 1(j). The wording of this provision prescribes the provision of all cash benefits that fall within the material scope of the Reg., individual risks are no longer mentioned. Lump sum benefits are no longer mentioned separately, like the reimbursement of contributions these are included under the broad term pensions (Art. 1(w)). In order to secure the freedom of movement of workers and Union citizens under Community law (Art. 45, 21(1) TFEU) and to prevent the legal disadvantage of losing rights to cash benefits that have been acquired (cf. Recital 13), this provision prescribes payment of cash benefits without reduction to the beneficiaries of such residing in the territory of another Member State (including an EEA state or Switzerland) and excludes the application of any regulations of Member States to the contrary. In as far as the social security legislation of the Member States differentiates 2 according to nationality and only excludes foreigners from the granting of benefits abroad, the export of benefits is also secured by the equal treatment provisions of Art. 4 under primary law and by Art. 45(2) TFEU. However, the residence requirement can also be regarded as an indirect or covert form of discrimination leading to the same result (see in particular Case C-57/96, (Meints), Rolf Schuler

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EU:C:1997:564 para. 44 and Case C-269/07 (Commission/Germany), EU:C: 2009:527 para. 53) if it is not objectively justified or not regarded as proportionate and is intrinsically liable to affect migrant workers more than national workers and if there is a consequent risk that it will place the former at a particular disadvantage (cf. in particular the judgments Meints, para. 45, and Commission/ Germany, para 54, s. para. 12). Due to its general relevance for the freedom of movement of workers, the CJEU also applies Art. 7 to social advantages that also fall within the special scope of the Reg. (Case C-111/91 (Commission/ Luxembourg), EU:C:1993:92 para. 20-21 and Case C-85/96 (Martínez Sala), EU:C:1998:217 para. 27; Case C-206/10 (Commission/Germany), EU:C: 2011:283). II. Commentary 1. Waiving of the residence rules and other territorial conditions for benefits

Art. 7 secures the right to cash benefits for beneficiaries staying or residing in another Member State (including an EEA state and Switzerland) in that it revokes the so-called residence rules that link the unrestricted right to benefits with national residence. The provision names virtually all possible restrictions (reduction, amendment, withdrawal etc.) and excludes any reduction of rights linked with the place of residence in another Member State (settled case law CJEU, Case 379-381/85, 93/86 (Giletti et al.), EU:C:1987:98; Case 92/81 (Camera), EU:C:1982:219). The right can derive from “the legislation of one or more Member States”, i.e. it is irrelevant whether it is based on purely national law or on Community law (CJEU, Case 51/73 (Smieja), EU:C:1973:116). The latter was now expressly incorporated in the wording of the provision. Whereby it is clear that Art. 7 does not constitute an original basis for entitlement, but instead assumes an existing entitlement from which it “removes the territorial restriction” (in this sense CJEU, Case 32/77 (Giuliani), EU:C:1977:165; Case C-251/89 (Athanasopoulos), EU:C:1991:242). Pursuant to the case law of the CJEU this provision also prevents exclusion of the acquiring of a right to pensions and allowances solely on the basis that the beneficiary does not reside in the territory in which the institution charged with effecting payment is located (CJEU, Case 92/81 (Camera), EU:C:1982:219; in this sense also the CJEU, joined Cases C-396/05 (Habelt), C-419/05 (Möser), C-450/05 (Wachter), EU:C: 2007:810 = ZESAR 2009, 28 et seq. with comment Schuler). 4 Moreover, the rights to freedom of movement prohibit Member States from making benefits that are liable to export dependent on (territorial) conditions other than the residence requirement if these have the effect of excluding export, such as for example conditions whereby the claimant must have stayed in the respective Member State before or at the time the application is made (in this respect Art. 21(1) TFEU with regard to short-term disability benefits for young persons pursuant to British legislation CJEU, Case C-503/09 (Lucy Stewart), 3

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EU:C:2011:500 = ZESAR 2012, 83 et seq. with in part critical comment Reinhard). 2. Material scope

Decisive for the obligation of exporting a cash social benefit is its classifica- 5 tion as a benefit of social security pursuant to Art. 3. Please refer to the commentary of Art. 3 and Art. 70 for the problems of classification. 6 The export of benefits is also secured without restriction for – invalidity pensions (including lump-sum benefits, reimbursement of contributions and allowances Art. 1(w)), – old-age pensions and survivors’ pensions, – pensions in respect of accidents at work and occupational diseases and – death grants (Art. 1(y)). Type A invalidity benefits are expressly excluded from the principle of the export of benefits. Pursuant to Art. 44 (2) these must be paid solely by the institution of the Member State whose legislation applied at the time incapability for work and subsequent invalidity occurred. As the German pension insurance scheme belongs to the Type B systems, these regulations have no direct relevance for its national pension insurance institutions. Special non-contributory cash benefits are excluded from the scope of Art. 7 7 pursuant to Art. 3 (3) in conjunction with Art. 70 (see the respective commentary). In the past the CJEU also included “risk-related” benefits for securing a minimum existence to the pensions liable for export (for old-age) (CJEU, Case 1/72 (Frilli), EU:C:1972:56 with respect to the Belgium “guaranteed old-age pension”; Case 187/73 (Callemeyn), EU:C:1974:57 with respect to the Belgium allowance for the disabled; Case 63/76 (Inzirillo), EU:C:1976:192 with respect to the French disabled adults’ allowance; Case 139/82 (Piscitello), EU:C: 1983:126 with respect to the Italian “social pension”). Special benefits under pension law such as pension supplements, allowances and revaluation increases, e.g. pension increases due to a specific period of residence (CJEU, Case 51/73 (Smieja), EU:C:1973:116; Case 293/88 (Winter-Lutzins), EU:C:1990:170; Case 236/88 (Commission/France), EU:C:1990:303 with regard to the supplementary allowance of the French Fonds national de solidarité) were also subjected to the export obligation. It must, however, be ascertained in this respect whether, pursuant to Art. 70 (3) in conjunction with Annex X, these benefits are excluded from the export obligation as special non-contributory cash benefits. Please refer to Art. 1(w) for the new definition of pensions. There are exceptions for sickness benefits in cash (see here CJEU, Case 41/77 8 (Warry), EU:C:1977:177), for rehabilitation benefits in cash (see CJEU, Case 69/79 (Jordens-Vosters), EU:C:1980:7) and for long-term care insurance benefits in cash (CJEU, Case C-160/96 (Molenaar), EU:C:1998:84). See here Art. 17 para. 4 et seq.; Art. 21 para. 2.

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Art. 10 does not prohibit the legislation of a Member State making the receipt of an unemployment benefit conditional on the requirement of the place of residence being in the territory of this State (cf. CJEU, Case C-406/04 (De Cuyper), EU:C:2006:491). Art. 63 prescribes that Art. 7 shall only apply for unemployment benefits in cash in cases provided for in Art. 64 and 65 (see here the commentary to Art. 63). 10 The coordination of family benefits provides for a territorial equal treatment regulation for family members residing in a State other than the competent State (Art. 67). The entire family with both potentially entitled parents must be taken into consideration for the granting of these benefits and the decision as to which claim is to be exported made on the basis of the priority rules laid down in Art. 68. 9

3. Spatial and personal scope

Art. 7 prohibits residence rules only between Member States (with respect to predecessor regulations e.g. CJEU, Case C-331/06 (Chuck), EU:C:2008:188). The ensured export of benefits is therefore restricted to beneficiaries that reside in a Member State. So Community law does not stand in the way of national legislations that exclude the export of benefits to non-Member States or make this subject to bilaterally agreed conventions (CJEU, Case 105/89 (Buhari Haji), EU:C:1990:402; Case C-331/06 (Chuck), EU:C:2008:188). In as far as social insurance conventions guarantee nationals the export of benefits to convention states, the principle of equal treatment also requires the export of benefits to nationals of other Member States residing in the convention state (for the aggregation of periods in favour of nationals of other Member States not subject to convention legislation (CJEU, Case C-55/00 (Gottardo), EU:C:2002:413, for the expansion of European social security coordination to include non-Member States cf. Schuler, Das europäische koordinierende Sozialrecht aus der Sicht der Rechtsprechung, in: Schulte/Barwig (eds.), Freizügigkeit und Soziale Sicherheit 1999, p. 233, 243). This appears to be a consequence of the newly formulated principle of equal treatment in Art. 4, which in contrast to former coordination legislation no longer requires that the person concerned lives in a Member State. 12 The waiving of the residence rules applies to all beneficiaries, including all persons that fall under the Reg. These also include nationals of non-Member States pursuant to Reg. No. 1231/2010 from 24.11.2010 legally resident in a Member State. 11

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Article 8 Relations between this Regulation and other coordination instruments (1) This Regulation shall replace any social security convention applicable between Member States falling under its scope. Certain provisions of social security conventions entered into by the Member States before the date of application of this Regulation shall, however, continue to apply provided that they are more favourable to the beneficiaries or if they arise from specific historical circumstances and their effect is limited in time. For these provisions to remain applicable, they shall be included in Annex II. If, on objective grounds, it is not possible to extend some of these provisions to all persons to whom the Regulation applies this shall be specified. (2) Two or more Member States may, as the need arises, conclude conventions with each other based on the principles of this Regulation and in keeping with the spirit thereof.

I. Spirit and Purpose

As a result of the supranationality of the coordinating European social law, any social security convention that has been entered into force by the Member States before replaced by the rules of Reg. No. 883/2004. Art. 8 settles the hierarchy between bi- and multilateral social security conventions and the Regulation. The question of hierarchy occurs in all cases of collisions between legal acts from different states. It has to be clarified which one of those legal systems that are overlapping in material law applies. In the European context such conflicts appear in regards of the relation between European social law and interstate social law. Since both supranational legal systems influence the national social law, overlapping and contradicting rules may occur within their scopes of application, leading to the question as to whether interstate law or European social law applies. According to Art. 8 (1) the Regulation replaces interstate social security conventions within its personal and substantial scope of application. Such conventions can only be entered into force between two or more Member States or between two or more Member States and at least one other state – the latter only in cases that are not even partially regulated by one of those other states. Art. 6 of the Reg. No. 1408/71 stated this explicitly. It arises, however, from an interpretation of the Regulation currently in force, already. By not applying the social security conventions, it shall be ensured that the system of the coordinating Regulation will not be overlapped and its security standard, thereby, not be restricted by contradicting national legal acts. Everybody who falls under the scope of application of the Regulation be able to avail himself of the rights granted by the Regulation at any time (CJEU, Case C-23/92 (Grana-Novoa), EU:C:1993:339). Art. 8 does not abrogate any social security convention in terms of its legal effectiveness. Community law cannot repeal international treaties entered into Heinz-Dietrich Steinmeyer

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by the Member States. Only the parties of the certain treaty can do so. At Community level, however, it is possible to confine the applicability of such treaties, as happened in the area of social security through Art. 8. This is meant to ensure that – aside from certain exhaustively listed exceptions – the benefits granted by the coordinating Reg. No. 883/2004 are not withheld from the citizens. At the same time, this guarantees that new social security conventions entered into by the Member States cannot overturn the Regulation, which ensures that all citizens of Member States may avail of the Regulation at all times. 5 Art. 8 (1) takes into account previous judgements by the CJEU. In this context, it should be stressed that – aside from an explicit mention in Annex II – certain rules from social security conventions which had been entered into by the Member States before the Regulation came into force continue to apply given that they are more favourable to the beneficiaries or they arise from specific historical circumstances and their effect is limited in time. 6 Art. 8 (2) enables the Member States to conclude conventions with each other, provided those are based on the principles of the Regulation and in keeping with the spirit thereof and there is a certain need for such a convention. This rule is meant to ensure that the Member States cannot overturn the system of the Regulation through intergovernmental agreements. Art. 8 (2) only enables the Member States to create further-reaching rights, which are essential in the relation of two or more Member States due to special situations. 7 Contrary to the predecessor rule (Art. 7 Reg. No. 1408/71) the Regulation does not state an exception of its priority for any multilateral agreements – esp. in the basic transport policy – anymore. This for example applies to the Agreement concerning social security for Rhine boatmen which is very similar to the rules of the Regulation. Since all riparian states are covered by the European law on social security coordination there is no need anymore for a primacy of this agreement. II. Commentary

The predecessor rule in Reg. No. 1408/71 stated that the Regulation replaces previous social security conventions only within its personal and material scope of application. Outside the scope of the Regulation the conventions stay applicable to their full extend. It was decided not to create such a clarifying rule within the new Regulation since this result already emerges from the rules concerning the material und personal scope of the Regulation. 9 The European social law only restricts intergovernmental agreements as far as those affect areas of the Union law. This is intended to prevent a coexistence of multiple complex coordination instruments for social security within the EU. Such necessity does not occur outside the scope of Union law, which is why the legal relationships between Member States and third countries are not restricted. 8

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In Case C-82/72 ((Walder), EU:C:1973:62), the Court notes that considering the basic relation between intergovernmental social law and European Union Law as laid down in Reg. No. 1408/71 the Regulation replaces any existing social security convention entered into force by the Member States for every person to whom the Regulation applies as long as those conventions are not included in Art. 6 and 7 or in the Annex III (now Art. 8 (1)). This judgement is not surprising, as it only reproduced (and reproduces) the existing law. However, the CJEU furthermore stated that those social security conventions are not applicable even if they are more advantageous to persons covered by Reg. No. 1408/71 than the Regulation itself (EU:C:1973:62 para. 7). Thus, it was established that social security conventions concluded by the Member States before Reg. No. 1408/71 are not to be applied outside the legally given exceptions, even if they are more advantageous. The judgement reduced the importance of the intergovernmental social security conventions to a minimum. However, in Case C-227/89 (Rönfeldt), EU:C:1991:52 the CJEU ruled that social security benefits which were introduced into national law by intergovernmental conventions do not become invalid only because the conventions have become inapplicable due to Reg. No. 1408/71 (which was replaced by Reg. No. 883/2004). It is unclear whether the CJEU’s ruling in the Rönfeldt Case is contrary to the established case law. This would mean a ”renaissance” of the social security conventions entered into by the Member States before the entry into force of Reg. No. 1408/71, as some authors conclude (Költzsch, Eine Entscheidung des EuGH und ihre Folgen für das internationale Sozialrecht, SGb 1992 p. 591 et seq.). In the Rönfeldt Case the CJEU had to decide whether periods in the pension insurance which were acquired in Denmark before Reg. No. 1408/71 entered into force were to be taken into account in terms of the calculation of the retirement pension at age 63. The convention between the Federal Republic of Germany and the Kingdom of Denmark from 14 August 1953 stated in Art. 17 (1, No. 2 b) that those periods in the pension insurance acquired by Germans in Denmark were to be taken into account up to a maximum time of 15 years in the calculation of the German pension insurance. This rule as the entire convention was replaced by Reg. No. 1408/71. The CJEU explained the consideration of the periods in the pension insurance acquired in Denmark by the argument that it would contradict the intention of the Freedom of Movement of Workers as laid down in Art. 45-48 TFEU = Art. 39-42 EC Treaty, if workers who avail of this right would lose benefits that were granted to them by the law of a Member State (EU:C:1991:52). There Court thereby holds on to a consistent line of case law which states that an action in accordance to the Freedom of Movement of Workers may not result in dismantling already acquired rights. This is called the Petroni-Principle – named after the first judgement to deal with the specific problem (CJEU, Case C-24/75 (Petroni), EU:C:1975:129). This principle of most favourable condition is based Heinz-Dietrich Steinmeyer

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on evading disadvantages occurring from migration. It leads – in this case – to a more advantageous position of those who can avail of the earlier conventions compared to those to whom Reg. No. 1408/71 (now 883/2004) applies. According to the jurisdiction of the CJEU, maintaining those benefits from earlier conventions does not contradict the ruling in the Walder Case, either. In this Case the CJEU displayed the inapplicability of social security conventions after Reg. No. 1408/71 (now 883/2004) entered into force. In the Rönfeldt Case, however, not the social security convention itself was more advantageous but its content which was transformed into national law. Thus, the CJEU avoids portraying the conflict between European and intergovernmental law and solely covers the relation between European and national law applying the Petroni-Principle. 14 It is unclear whether this distinction is possible. Taking the ruling in the Walder Case seriously it must be concluded that national law that transforms social security conventions is not applicable, either, since benefits from intergovernmental agreements – normally – do not emerge before those treaties are transformed into national law. The Rönfeldt-ruling does not respect this special feature of the system, although the Walder Case gave a hint to this. 15 The unduly vague wording of the decision (”social security advantages”) does not give a hint to the question as to whether only those pension entitlements acquired before the Regulation entered into force are to be taken into account. Due to the fact that the Regulation does not state a restriction it can be concluded that pension entitlements that were acquired after the Regulation entered into force and emerge from national law that transforms social security conventions are to be considered, as well (Költzsch, SGb 1992, 591, 597). If this conclusion proves to be true – which is hinted by the wording – many cases in which a benefit has to be granted will occur in the future. Technically, this would rule out the findings of the Walder-decision, since in this case national law that is based on intergovernmental conventions would have to be taken into account when applying the Regulation, as well. From a national point of view this can only be prevented by withdrawing from existing social security conventions and repealing the transformation law or restricting its scope to people to whom the Regulation does not apply. However, the CJEU has made clear that employees who avail of their Freedom of Movement after Reg. No. 1408/71 entered into force cannot claim to have suffered a loss of social security benefits that arose out of earlier conventions (CJEU, Case C-475/93 (Thévenon), EU:C:1995:371). Thus, the further application of social security conventions concluded by the Member States remains restricted to special constellations. In a further decision the CJEU has made clear that the principle that employees shall not lose their benefits of social security just because a bilateral treaty was replaced by the Regulation does not apply as far as in the first calculation of the benefits with regards to the Regulation a comparison of the benefits emerging from the Regulation and those emerging from the convention was already made – with the conclusion that the application of the Regulation is more advantageous than the application of the

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treaty (CJEU, Case C-113/96 (Rodriguez), EU:C:1998:203). Contrarily, Art. 8 does not prevent the application of provisions from a more advantageous intergovernmental treaty in cases when the employee has availed of his right of Freedom of Movement before Reg. No. 1408/71 entered into force – this even applies if (in this example as a result of a legal qualifying period from the applicable national law) the entitlement to benefits was not completed before the Regulation entered into force (CJEU, Case C-75/99 (Thelen), EU:C:2000:608). This is justified by the fact that the insured person would otherwise lose the benefits that the Regulation states (cf. also CJEU, Case C-277/99 (Kaske), EU:C: 2002:74; CJEU, Case C-471/99 (Dominguez), EU:C:2002:523). Art. 8 deals with this problem by on the one hand confirming the principle of the more advantageous solution and one the other hand making the further application of the provisions of such conventions conditional on to their inclusion in Annex II. This, however, does not answer the said question since Art. 7 Reg. No. 1408/71 also stated that particular – especially more beneficial – provisions continued to apply, given they had been included in the Annex. Art. 8 (1) sentence 4 cannot be comprehended out of itself. Its purpose is – as 16 a consequence of two decisions: CJEU, Case C-307/97 (Saint-Gobain), EU:C: 1999:438; CJEU, Case C-66/00 (Gottardo), EU:C:2002:397 – that the principle of equal treatment of all citizens of EU Member States also applies to social security conventions, which the Court expressively stated in the Gottardo decision. This means that so-called closed bilateral agreements – “closed” since their scope is limited to citizens of the contracting states – apply in a way that citizens of third Member States are also included. This led to the consequence that practically most agreements entered into by the Member States afterwards are socalled open agreements (cf. Recommendation P 1 of the Administrative Commission). Provisions in such agreements that shall, contrarily, only apply to citizens of the contracting parties have to be included in Annex II. This, however, requires verifiable objective grounds. Therefore, Annex II in the case of Germany mostly contains such provisions that take account of World War II and the division of Germany. The Grana-Novoa-decision (CJEU, Case C-23/92, EU:C:1993:339) shows 17 that the relationship between intergovernmental law and the Regulation surely is not cleared in detail. The Spanish citizen, Ms. Grana-Novoa, who had been working solely in Germany and Switzerland, claimed a disability pension in Germany. The claim was rejected due to a lack of periods of contribution in the Federal Republic. She then argued that the social security convention between Germany and Switzerland (Abkommen zwischen der Bundesrepublik Deutschland und der Schweizerischen Eidgenossenschaft über Soziale Sicherheit vom 25.2.1964, BGBl. 1964 II Nr. 37 S. 1293) applied. Within the scope of this convention periods of contribution in the Switzerland are to be taken into account, as well. This agreement, however, only applies to citizens of the contracting states. Contrarily, it was argued that the employment in Switzerland had to be Heinz-Dietrich Steinmeyer

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taken into account due to the principle of non-discrimination (Art. 3 Reg. No. 1408/71). This leads to the question as to what extend provisions of the Reg. No. 1408/71 (now 883/2004) can reach into continuing bilateral social security agreements. The Court clearly states in this decision that the scope of application of Art. 6 et seq. Reg. No. 1408/71 (now Art. 8) is not affected by an agreement between just one Member State and one or more third states. When Art. 3 of the Reg. No. 1408/71 (now Art. 4) speaks of the same benefits and the same obligations under the legislation of a Member State this “legislation” does not only include social security conventions entered into by a Member State and a third state. In this context the CJEU points out that this interpretation is not affected by the fact that such an agreement might have been incorporated into the legal system of certain Member States as a law and thus become part of the national law. The Court justifies its finding with the argument that the uniform application of the Regulation throughout the Community has to be ensured and thus cannot depend on the method with which the social security conventions concluded by the Member States are included into their national legal system. Accordingly, the national implementation does not make these conventions “legislation” within the meaning Art. 4 of the Regulation. 18 This decision is remarkable in two respects. On the one hand it is made clear that the principle of national treatment does not require establishing the highest social security possible. Contrary to the Rönfeldt decision the social situation is not being deteriorated since citizens of a state that is not a party of the social security convention did not have an entitlement of their insurance periods to be taken into account at any point in time. Since the Reg. No. 1408/71 and accordingly Reg. No. 883/2004 only replaced certain conventions, a difference of treatment does not result from the fact that bilateral agreements only scope a particular group of people. To this extent, the Petroni-principle is affected, as well. On the other hand, the decision hints that the CJEU is breaking away from the view that intergovernmental agreements and incorporated law are to be strictly separated. As the Rönfeldt ruling already showed, maintaining this separation does not live up to the purpose of Art. 6 et seq. of the Reg. No. 1408/71 (now Art. 8). The applicability of certain social benefits cannot depend on the question as to whether a Member State must transform intergovernmental agreements or not. The relation between the Regulation and intergovernmental agreements can only be resolved satisfactorily by deviating from the dualism of international law and national law in this respect – as clearly demonstrated by the Court in this decision for the first time. 19 Several years ago, the CJEU has further developed the principles of the Rönfeldt decision (CJEU, Case C-277/99 (Kaske), EU:C:2002:74). In this specific case, the applicant had been working first in Austria then in Germany before she became unemployed in Germany. Immediately after she became unemployed she returned to Austria (her new country of residence), where she claimed unemployment benefit arguing that – within the scope of the German-

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Austrian convention on unemployment insurance – the periods of employment she had completed in Germany were to be taken into account. The Court ruled that the findings of the Rönfeldt decision also apply in cases when the migrating employee has availed of his Freedom of Movement before Reg. No. 1408/71 and the TFEU as well entered into force; meaning a point in time in which the employee could not avail of Art. 45 TFEU (= Art. 39 EC Treaty) in the state where he was working. The Court stated that the situation of a an employee who is citizen of a Member State – as far as the periods of insurance or employment had begun before Reg. No. 1408/71 came into force – has to be judged by the provisions of the intergovernmental agreement for the whole period of time the employee has exercised his right of Freedom of Movement, taking account of all periods of insurance and employment the employee has completed with no regards to the question as to whether those time periods took place before Reg. No. 1408/71 entered into force in the home Member State of the employee or afterwards. If, however, the individual exercises his Freedom of Movement again and completes further periods of insurance or employment that take place after Reg. No. 1408/71 entered into force and after he has appealed to all of his rights from the convention, his new situation will be judged by the convention. National law may create provisions that are more advantageous than Community Law as far as they do not interfere with the principles of Community Law. In so far, Art. 45 TFEU (= Art. 39 EC Treaty) precludes a national provision by a Member State that grants employees who have been in this Member State for at least 15 years before their last employment abroad special conditions to unemployment benefits. Art. 8 (2) only concerns such agreements that are entered into by the Member 20 States since the date of application of the Regulation. Therefore, Art. 8 does not affect the conventions included in Annex II (cf. CJEU, Case C-305/92, EU:C: 1994:175).

Article 9 Declaration of the Members States on the scope of this Regulation (1) The Member States shall notify the European Commission in writing of the declarations made in accordance with point (l) of Article 1, the legislation and schemes referred to in Article 3, the conventions entered into as referred to in Article 8(2), the minimum benefits referred to in Article 58, and the lack of an insurance system as referred to in Article 65a(1), as well as substantive amendments. Such notifications shall indicate the date from which this Regulation will apply to the schemes specified by the Member States therein. (2) These notifications shall be submitted to the European Commission every year and shall be given the necessary publicity.

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Part 2: Regulation (EC) No 883/2004 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Contents of the notification obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Legal nature of the notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose 1

Art. 3 determines the legal material scope of Reg. No. 883/2004. Art. 9 can be understood as a supplementary provision of Art. 3. The notification obligation imposed on the Member States with regard to the legislation, schemes and provisions referred to in Art. 3 and other stipulations in the field of social security does not only create the information basis for the Commission that it needs to discharge its tasks regarding the coordination of social security. Publication of the notifications in the Official Journal of the EU (para. 2) brings the social security legislation of the Member States to the knowledge of the EU-public so to speak. In the first coordination regulation, Reg. (EEC) No. 3, the legislation to which the Regulation applied was listed in an exhaustive Annex. Due to the dynamic development of the social benefits schemes of the Member States and the expansion of the EU, this provision would have reached quantitative and technical limits. Art. 9 has been amended by Reg. No. 465/2012. This amendment concerned the adaptation to the renaming of the “European Commission” undertaken in the TEU (cf. Art. 13 (1) TEU) on the one hand. On the other hand the newly created Art. 65 a made necessary the notification of the absence of an insurance scheme for self-employed persons in the Member State of residence. II. Commentary 1. Contents of the notification obligation

Conform to the aforementioned function of notification, such notification includes, in compliance with para. 1, the legislation, schemes and provisions referred to in Art. 3. In the predecessor regulation (Art. 5 Reg. No. 1408/71) noncontributory cash benefits were expressly listed as the subject matter of the notification obligation. Art. 9 does not expressly mention the special non-contributory cash benefits that are now regulated in Art. 70. However, this does not mean that they are not encompassed by the notification obligation. The notification obligation laid down in para. 1 for the legislation, schemes and provisions referred to in Art. 3 (1) also encompasses the special non-contributory cash benefits that pursuant to Art. 3 (3) fall within the scope of the Regulation. 3 The declarations within the meaning of Art. 1 (I) are also subject to the notification obligation in compliance with para. 1. These concern collective agreements that take on the character of statutory provisions within the meaning of the Reg. if they fulfil the conditions in Art. 1 (I) and a declaration is made to that effect, notified to the President of the European Parliament and the President of the Council of the European Union. 2

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Art. 9 (1) also requires notification of any bilateral and multilateral social se- 4 curity conventions entered into by the Member States. In compliance with Art. 8 (1) the Regulation on principle replaces any social security convention applicable between the Member States. Art. 8 (2), however, leaves the possibility of concluding new conventions open. The Commission must also be notified of the provisions of these conventions due to their importance for coordination law. A special stipulation of the Member States subject to notification concerns the 5 provision in Art. 58 from the area of old-age and survivors’ pensions. The minimum benefit referred to in Art. 58 is important for correct calculation of the amount of the benefit making general knowledge thereof necessary. Notification in compliance with Art. 9 not only encompasses the legal and ad- 6 ministrative integration of the social security provisions in national legislation for the first time, but in compliance with para. 1 (1) also any substantive amendments made subsequently. Pursuant to para. 2 notifications must be submitted every year and then published in the Official Journal of the EU. 2. Legal nature of the notification

The CJEU has over time worked out the following principles with regard to 7 the question of the consequences of submitting or not submitting notifications. If a Member State has mentioned a legal provision in a declaration submitted in compliance with Art. 9, then the mandatory consequence is that the benefits referred to in this provision are social security benefits within the meaning of the Reg. (CJEU, Case 35/77 (Beerens), EU:C:1977:194; Case C-251/89 (Athanasopoulos), EU:C:1991:242 para. 28; Case C-225/10 (Perez García), EU:C: 2011:678 para. 36). In other words, the material scope can encompass a benefit that according to the criteria developed in Art. 3 would not normally fall within its scope. The Member States are then obliged to adhere to their declarations (CJEU, Case C-228/88 (Bronzino), EU:C:1990:85; Case C-12/89 (Gatto) EU:C: 1990:85). Conversely, if a legal provision is not mentioned in a declaration within the 8 meaning of Art. 9, then it does not necessarily mean that it does not fall within the scope of the Reg. In fact it must be determined for every benefit based on the criteria developed in Art. 3 whether or not it then falls within the material scope of Reg. If this is the case, then the scope must be affirmed even if the respective Member State did not submit a declaration in compliance with Art. 9 (settled case law of the CJEU, cf. Case 100/63 (van der Veen), EU:C:1964:65; Case 24/64 (Dingemans), EU:C:1964:86; Case 79/76 (Fossi), EU:C:1977:59; Case C-20/96 (Snares), EU:C:1997:518; Case C-297/96 (Partridge), EU:C:1998:280).

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Article 10 Prevention of overlapping of benefits Unless otherwise specified, this Regulation shall neither confer nor maintain the right to several benefits of the same kind for one and the same period of compulsory insurance. Art. 10 Reg. No. 987/09 Prevention of overlapping of benefits Notwithstanding other provisions in the basic Regulation, when benefits due under the legislation of two or more Member States are mutually reduced, suspended or withdrawn, any amounts that would not be paid in the event of strict application of the rules concerning reduction, suspension or withdrawal laid down by the legislation of the Member States concerned shall be divided by the number of benefits subjected to reduction, suspension or withdrawal.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. History of origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Function and deviating regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Exclusion of the receipt of more than one benefit of the same kind from the same compulsory insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Benefits of the same kind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Prevention of overlapping of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 2 5 5 6 8

I. Spirit and Purpose 1. History of origin 1

Art. 10 contains a mere editorial amendment vis-a-vis the precursor provision of Art. 12 Reg. No. 1408/71. Emphasis is laid exclusively on the prevention of the overlapping of benefits. A change in substance has not occurred. Art. 10 Reg. No. 987/2009 is identical with Art. 7 Reg. No. 574/72. 2. Function and deviating regulations

According to its function of avoiding the overlapping of benefits Art. 10 preempts the simultaneous reception of benefits from several Member States and advantages of the persons concerned in comparison with persons who draw benefits from only one Member State. Prevention of overlapping is not mentioned in Art. 48 TFEU, but is a traditional principle of co-ordination law. The same is true of overlapping rules in bilateral agreements between Member States). 3 In this way the case law of the CJEU regards overlapping rules as a compensation for advantages arising from the fact that co-ordination law offers the application of different legislation of different Member States. On the other side the effects of overlapping rules are restricted by this case law through the operation of the principle of favourability or Petroni principle (CJEU, Case 24/75 (Petroni), EU:C:1975:129; Case 79/81(Baccini), EU:C:1982:106). Although according to this case law of the Court restrictions may be placed on migrant workers as a counterpart to the social security advantages which they derive under the Community regulations and which they could not obtain without them, 2

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the aim of Art. 48-51 of the Treaty would not be achieved if the effect of the application of those regulations were to withdraw or reduce the social security advantages which a worker enjoys under the legislation of a Member State alone. lt would be contrary to the objectives of Art. 48-51 of the Treaty if provisions designed to facilitate the movement of migrant workers in reality made it more difficult for them by depriving them of advantages which they could have enjoyed if it were not for those Articles of the Treaty and the provisions adopted by the Council to implement them. However, a limitation on the overlapping of benefits which would lead to a diminution of the rights which the persons concerned already enjoy in a Member State by virtue of the application of the national legislation alone is incompatible with Art. 51. Art. 10 not only contains a ban on the award of advantages on the basis of the 4 same period of compulsory insurance through the application of Reg. No. 883/2004, but also precludes equivalent benefits (awarded by institutions of different Member States) based on the same period of compulsory insurance, as far as there are no specific provisions derogating from this principle. References under former law to benefits of invalidity, age, death (pensions) or occupational diseases are now contained in Art. 53-55. A specific provision deals with the case in which claims to cash benefits for long-term care (vis-a-vis the institution of the competent Member State) and claims to benefits in kind for long-term care (vis-à-vis the institution of the Member State of residence or stay) arise at the same time. Due to the introduction of Art. 5, in which the equal treatment of facts, income etc. was laid down, the former provision on the overlapping of income and employment was no longer needed. II. Commentary 1. Exclusion of the receipt of more than one benefit of the same kind from the same compulsory insurance

The main aim of Art. 10 is to preclude the accumulation of several benefits 5 resulting from the same period of compulsory insurance. The application of this principle is limited to benefits of the same kind. The wording of Art. 10 refers exclusively to periods of compulsory insurance. Special provisions, however, are contained in Art. 14 where the parallel existence of periods of compulsory and voluntary insurance is concerned. 2. Benefits of the same kind

According to the established case law of the Court, social security benefits 6 must be regarded, irrespective of characteristics peculiar to the various national laws, as being of the same kind when their purpose and object together with the basis on which they are calculated and the conditions for granting them are identical. On the other hand, characteristics which are purely formal must not be considered relevant criteria for the classification of the benefits (CJEU, Case Rolf Schuler

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171/82 (Valentini), EU:C:1983:189; Case 197/85 (Stefanutti), EU:C:1987:422; Case C-98/94 (Schmidt), EU:C:1995:273; Case C-366/96 (Cordelle), EU:C: 1998:57). 7 Case-law of the CJEU: – Benefits acquired under the legislation of two Member States, which seeks to ensure that an aged person deprived of the income of his deceased spouse has sufficient means of subsistence, and the respective amounts of which are determined on the basis of the insurance and social security contributions of that spouse, are benefits of the same kind (CJEU, Case C-238/81(Van der Bund-Craig), EU:C:1983:124). – An early retirement pension acquired under the legislation of one Member State and an invalidity pension acquired under the legislation of another Member State are to be regarded as benefits of the same kind within the meaning of Art. 12(2) Reg. No. 1408/71. (CJEU, Case 128/88 (Di Felice), EU:C:1989:153; Case 108/89 (Pian), EU:C:1990:167; Case 109/89 (Bianchin)) or an old-age pension and an invalidity pension not yet converted into and old-age pension (CJEU, joined Cases 116/80, 117/80, 119-121/80 (Celestre et al.), EU:C:1981:159). – A retirement pension granted under the legislation of one Member State, on the basis of periods of insurance personally completed in that State by the person concerned, and a retirement pension obtained under the legislation of another Member State by that person as a divorcee, on the basis of periods of insurance completed by that person’s former spouse, are not benefits of the same kind (CJEU, Case 197/85 (Stefanutti), EU:C:1987:422; also cf. Case C-98/94 (Schmidt), EU:C:1995:273 and Case C-366/96 (Cordelle), EU:C:1998:57). The principles of this case law are now the subject of Art. 53 para. 1. 3. Prevention of overlapping of benefits 8

Art. 10 Reg. No. 987/2009 offers a solution to the problem that the strict application of overlapping rules would lead to the situation where no amount at all would be paid. In this case a method has to be chosen by which all the amounts subject to reduction, suspension or withdrawal shall be divided by the number of benefits in question (arithmetic average).

Title II Determination of the legislation applicable Bibliography: Edler, Die Kollisionsnormen der VO 1408/71 für Selbständige, ZESAR 2003, p. 156 et seq; Eichenhofer, Internationales Sozialrecht, 1994; European Observatory on Social Security for Migrant Workers, European Report, 2001; Hanau, Das ArbeitnehmerEntsendegesetz, NJW 1996, p. 1369 et seq.; Jorens (ed.), Think Tank Report 2008, Towards a

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Overview new framework for applicable legislation – new forms of mobility, coordination principles and rules of conflict; Steinmeyer, Die Einstrahlung im internationalen Sozialversicherungsrecht 1981; Steinmeyer, Europäische Rechtsprechung und Gesetzgebung im Grenzbereich von Arbeits- und Sozialrecht in: Liber Amicorum Krasney, 1997, p. 567 et seq.

Overview Title II deals with the determination of the legislation applicable. Therefore, it 1 compiles a detailed catalogue of conflict rules. The catalogue shows parallels to provisions of the legislation applicable according to intergovernmental social security agreements. The Regulation contains bilateral conflict rules that determinate the applicable social security legislation if there is a case with a relation to different member states (cf. Eichenhofer, Internationales Sozialrecht, 1994 p. 216 et seq.; Steinmeyer, Die Einstrahlung im internationalen Sozialversicherungsrecht 1981, p. 24, 38 et seq., 82 et seq.). It is the task of both the Regulation’s provisions and of the provisions of Private International Law to determine the applicable national legislation. They do not make a unilateral decision in favour or against a national legislation, but only state which of the involved legislations is applicable. This cannot be put into question by stating that Art. 11 to 16 constitute a compromise as the creation of a law does not state anything about its classification as a conflict rule. This fact cannot be challenged by claiming that the international Private Law’s justice does not have an equivalent in social security law. The opposite is correct. Art. 11 to 16 determine the focal point of the particular situation or legal relationship and they search for its closest connection to a national legal system. This is in accordance with the spirit of classic Private International Law. The fact that there is a uniform determination of the applicable law used for national systems with different structures is in the nature of the provisions themselves. In the end, the discussion has to be reduced to the conceptual question whether the term bilateral conflict rule is necessarily connected with the fact that the institution that applies either one or the other legislation according to the decision of the conflict rules (cf. Devetzi, Die Kollisionsnormen des Europäischen Sozialrechts, Berlin 1998, p. 121 et seq.) It is the purpose of a conflict rule to determine the applicable legislation in a cross-border case. Unilateral conflict rules only state if a legislation is applicable or not, bilateral conflict rules decide which legislation is applicable in each case (cf. Schreiber, in: Schreiber/Wunder/Dern, VO (EG) Nr. 883/04, Overview Art. 11 para. 3). Art. 11 to 16 do not contain substantive provisions. They fulfil the assignment 2 of coordination given by the Regulation by allocating a certain legislation to every relevant case. They obtain that all employees and self-employed and their family members that immigrate or emigrate within the EU are fully covered by the Member States’ social security systems. They also make sure that the persons that fall within the personal scope of the Regulation are subject to the law Heinz-Dietrich Steinmeyer

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3

4

5

6

of only one Member State. Thus, double insurance and correspondingly double contribution can be avoided. A double insurance is allowed by Art. 14 but only under strict conditions. Art. 14 allows such a double insurance if a voluntary insurance or optional continued insurance and a compulsory insurance coincide. Art. 11 to 16 do not differentiate between contribution side and benefit side, they apply on both contribution and benefit side (cf. CJEU, Case C-104/80 (Beeck), EU:C:1981:48). The Regulation does not make a difference between social security law and other law. Art. 14 is only apparently in contradiction to this situation. This provision stipulates that Art. 11 to 13 do not apply to voluntary or optional continued insurance if certain conditions are met. The provision constitutes a strictly defined exception to the principle of avoidance of double insurance (cf. explanations to Art. 14) The parallels to the determination of the applicable legislation in international social security law result from the fact that the Regulation connects to the employment and only subsidiary to the place of residence. The Regulation covers social security schemes that are contribution- financed and tax-financed. As it aims to execute Art. 45 et seq. TFEU, it is, in principle, limited to securing the realization of the freedom of movement for employees and self-employed persons. To attach the applicable legislation to the employment means in principle that the place of employment or – in case of self-employment – the place of work performance are the relevant factors for the determination of the applicable law. The Regulation considers the attachment to the employment and therefore the attachment to the place of the employment to be the most appropriate (cf. Watson, p. 125). Art. 11 to 16 follow this principle and regulate – in a casuistic way – the different possible case scenarios that can arise when applying the principle. Art. 11 concentrates on a general rule for the event of a conflict of rules but already considers the situation of special groups of persons. Art. 11 is limited to the regulation of the principles. A place of employment can also be allocated to a certain Member State if there is an employment in a permanent facility on a continental shelf that borders on another Member State. In this situation, the employed or self-employed person needs to be offered the possibility to take part in the compulsory insurance in the state of employment, even if the person lives in another Member State (cf. CJEU, Case C-347/10 (Salemink), EU:C:2012:17). This emphasizes the priority of the principle of the State of employment. However, there is an ongoing debate about whether the principle of the State of employment should be replaced by the principle of the State of residence. The discussion is, for example, related to situation-related family benefits. But there can be found considerable restraint towards such a replacement. The attachment to the place of employment might not solve all possible constellations satisfyingly. The uniform treatment of all constellations speaks in favour of such an attachment. Special attachments lead necessarily to questions of legal differentiation and are likely to cause as many problems as they are likely to solve (cf.

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Overview

European Observatory on Social Security for Migrant Workers, European Report, Munich 2001, p. 12). Art. 12 and Art. 13 stipulate the exceptions of these principles, partly by creating special rules for certain groups of employees, e.g. civil servants, partly by addressing special constellations of case scenarios, e.g. the pursuit of activities in two or more Member States (Art. 13 para. 1 and 2) or the simultaneous pursuit of activities as an employed person and a self-employed person (Art. 13 para. 3). These provisions are supposed to cover the cases of a temporary stay in another Member State with regards to conflict of laws. In this situation, the legislation of the sending State should stay applicable under strict conditions. In case of a continuous activity in two or more Member States, the legislation of only one Member State is applicable. Both provisions aim to avoid double insurance. Art. 15 contains special provisions for auxiliary staff of the European Communities. Apart from the provisions in Art. 15, Art. 12 et seq. concern cases in which – by applying the general principle written down in Art. 11 – the applicable legislation cannot be determined reliably. Art. 14 has a special position as it deals with the voluntary insurance or optional continued insurance. The characteristic feature of the system of Art. 12 to 16 is that the starting point is the principle of the State of employment. According to this principle, the Regulation draws the consequences for special cases. If an appropriate attachment cannot be found by applying this principle, one has to apply the principle of the State of residence or the principle of the State of establishment. The former refers to the place of residence or the centre of interests of the person’s activities, the latter to the place of residence of the employer or the place where the office is registered or place of business of the undertaking or employer employing the person is situated. The principle of the State of residence takes priority over the principle of the State of establishment. The conflict rules prevail national law as they constitute supranational law. According to the German Federal Social Court, the special conflict rules of the NATO Status of Forces Agreement prevail the conflict rules of the Regulation (Bundessozialgericht SozR 6180 Art. 13 No. 3 = SGb 1983, p. 117 et seq.). One can say against this argumentation that the Reg. No. 883/2004 takes priority over all bilateral and multilateral agreements. The Regulation does not contain an exception from this principle. The provisions of the NATO Status of Forces Agreement are not listed in annex II so that the case-law of the German Federal Social Court has lost its basis since the Regulation came into force. The Regulation is supposed to create a unified system of coordination between the Member States and therefore achieve a unification of laws. Exceptions from this system can only be accepted in limited cases. The provisions in Art. 11 to 15 are partly quite rigid so that they do not lead to appropriate results in all cross-border cases. Therefore, Art. 16 offers the possibility to stipulate exceptions from Art. 11 to Art. 15. This possibility was used quite frequently under Reg. No. 1408/71. It is expected that this use will deHeinz-Dietrich Steinmeyer

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crease under Reg. No. 883/2004, but this provision will remain of a lasting significance. The provisions of Title II of the Regulation can also be applied if a case deals with activities outside of the territory of the Member States. The mere fact that the activities of an employee are executed outside of the territory of the Community is not sufficient to preclude the application of the EU’s legislation on the freedom of movement of workers if the employment continues to be sufficiently and closely connected to the territory of the EC (CJEU, Case C-237/83 (Prodest), EU:C:1984:277). This also means that the provisions of Title II prohibit the collection of contributions according to the social security legislation of the State of residence of an employee if the employee lives in one Member State and pursues his activities exclusively outside of the territory of the EC on grounds of a contract with an employer located in another Member State and if the employee pays contributions according to the legislation of the Member State of the employer’s location (CJEU, Case C-60/93 (Aldewereld), EU:C: 1994:271). Title II therefore also ensures that double insurance and gaps in coverage are avoided when an employee pursues his activities outside of the territory of the EC as long as legislation and jurisdiction of Member States of the EU are affected. This complicated system of conflict rules can lead to the erroneous payment of contributions to one national system due to the misjudgment of the relevant legislation of the Regulation. In this situation, the respective national institution has to refund the contributions that were erroneously made. Art. 11 to 16 only contain legislation for the different branches of social security that are covered by the Regulation. It is not possible to draw conclusions for the applicable national labor law (CJEU, Case C-196/90 (De Paep), EU:C: 1991:381). The purpose of the new Reg. No. 883/2004 is to make the conflict rules more flexible and to make them applicable to a larger number of cases and thereby to simplify the partly very detailed case law of the former Reg. No. 1408/71. In this way, the Regulation shall fulfil the requirement of the rule of law by offering clear and understandable legislation. The revised version of Art. 13 seems to live up to this aim. This provision simplifies the much more extensive provisions of the former Reg. No. 1408/71 and condenses the possible cross-border cases for employees pursuing activities in more than one Member State considerably. The problem to determine the terms “employment” and “self-employment” that occurs repeatedly when an employee or self-employed person pursues activities in different Member States and that can affect the application of the conflict rules (cf. CJEU, Case C-178/97 (Banks), EU:C:2000:169) without entailing the risk of the application of a vicious circle (cf. Art. 1 para. 6 et seq.) was not solved satisfyingly. In Art. 1 (a) and (b), the legislative authority still leaves the determination up to the Member States’ legal system according to the recent

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case law of the CJEU (CJEU, Case C-340/94 (De Jaeck), EU:C:1997:43). The problems of implementation that result from the fact that one activity of a person can be qualified differently by the Member states have not been solved at all (cf. CJEU, Case C-221/95 (Hervein (I)), EU:C:1997:47; CJEU, Case C-340-94 (De Jaeck), EU:C:1997:43; CJEU, Case C-178/97 (Banks), EU:C:2000:169; Voigt, ZESAR 2004, 121, 122 et seq.; Horn, ZIAS 2002, 120, 143 et seq.). While there already appear various problems of demarcation in national law (such as ‘false’ self-employment, persons in a comparable situation to employed persons or atypical workers), there are even more problems on supranational level (Edler, Die Kollisionsnormen der VO 1408/71 für Selbständige, ZESAR 2003, p. 156 et seq.). However, a better solution for these problems would make it necessary to partially harmonize the relevant national legislation. Even under the new law it won’t always be easy to determine if a person is 16 posted by an employer to another Member State to perform work according to Art. 12 or if a person normally pursues an activity as an employed person in two or more Member according to Art. 13. Generally speaking, it is multiple employment and not dispatched employment (posting) if a (self-) employed person pursues several independent activities during the same period of time in different Member States for several employers. Borderline cases are possible. The CJEU found, for example, that three German musicians living in Germany who worked in France on three balls in 1970 had to be considered as persons who normally pursue an activity as an employed person in two or more Member (Art. 13) and not as persons who are posted by the employer (Art. 12), even if such an interpretation was also possible (CJEU, Case C-8/75 (Football Club d ´Andlau), EU:C:1975:87; cf. also Devetzi, Die Kollisionsnormen, p. 77 and Edler, ZESAR 2003, 156, 162 with further examples). The Administrative Commission sought to substantiate the terms with its decision of 12 June 2009 but time will show if this addresses the problems sufficiently. There are certain differences between the conflict rules of the old and the new 17 Regulation that can lead to different references to legal systems. This situation is addressed by the transitional provision in Art. 87 (8) which states that the legislation of the old Regulation shall continue to apply as long as the relevant situation remains unchanged. This rule applies only for a period of ten years since the date of the coming into force of the Regulation, i.e. only until 30 April 2020. Where there is a difference of views between the institutions or authorities of 18 two or more Member States concerning the determination of the applicable legislation, Art. 6 of Reg. No. 987/2009 offers provisions for the solving of such disputes and for the provisional application. These provisions determine that the person concerned shall be made provisionally subject to the legislation of the legislation of the Member State where the person actually pursues his employment or self-employment, if the employment or self-employment is pursued in only one Member State. Secondary the legislation of the Member State of residence where the person concerned performs part of his activity has to be apHeinz-Dietrich Steinmeyer

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plied. Finally, the legislation of the Member State whose application was first requested where the person pursues an activity or activities in two or more Member States has to be applied.

Article 11 General rules (1) Persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. Such legislation shall be determined in accordance with this Title. (2) For the purposes of this Title, persons receiving cash benefits because or as a consequence of their activity as an employed or self-employed person shall be considered to be pursuing the said activity. This shall not apply to invalidity, old-age or survivors' pensions or to pensions in respect of accidents at work or occupational diseases or to sickness benefits in cash covering treatment for an unlimited period. (3) Subject to Articles 12 to 16: (a) a person pursuing an activity as an employed or self-employed person in a Member State shall be subject to the legislation of that Member State; (b) a civil servant shall be subject to the legislation of the Member State to which the administration employing him/her is subject; (c) a person receiving unemployment benefits in accordance with Article 65 under the legislation of the Member State of residence shall be subject to the legislation of that Member State; (d) a person called up or recalled for service in the armed forces or for civilian service in a Member State shall be subject to the legislation of that Member State; (e) any other person to whom subparagraphs (a) to (d) do not apply shall be subject to the legislation of the Member State of residence, without prejudice to other provisions of this Regulation guaranteeing him/her benefits under the legislation of one or more other Member States. (4) For the purposes of this Title, an activity as an employed or self-employed person normally pursued on board a vessel at sea flying the flag of a Member State shall be deemed to be an activity pursued in the said Member State. However, a person employed on board a vessel flying the flag of a Member State and remunerated for such activity by an undertaking or a person whose registered office or place of business is in another Member State shall be subject to the legislation of the latter Member State if he/she resides in that State. The undertaking or person paying the remuneration shall be considered as the employer for the purposes of the said legislation. (5) An activity as a flight crew or cabin crew member performing air passenger or freight services shall be deemed to be an activity pursued in the Member State where the home base, as defined in Annex III to Regulation (EEC) No 3922/91, is located. Article 19 Reg. No. 987/2009 Provision of information to persons concerned and employers (1) The competent institution of the Member State whose legislation becomes applicable pursuant to Title II of the basic Regulation shall inform the person concerned and, where appropriate, his employer(s) of the obligations laid down in that legislation. It shall provide them with the necessary assistance to complete the formalities required by that legislation. (2) At the request of the person concerned or of the employer, the competent institution of the Member State whose legislation is applicable pursuant to Title II of the basic Regulation shall provide an attestation that such legislation is applicable and shall indicate, where appropriate, until what date and under what conditions.

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Article 11 Article 20 Reg. No. 987/2009 Cooperation between institutions (1) The relevant institutions shall communicate to the competent institution of the Member State whose legislation is applicable to a person pursuant to Title II of the basic Regulation the necessary information required to establish the date on which that legislation becomes applicable and the contributions which that person and his employer(s) are liable to pay under that legislation. (2) The competent institution of the Member State whose legislation becomes applicable to a person pursuant to Title II of the basic Regulation shall make the information indicating the date on which the application of that legislation takes effect available to the institution designated by the competent authority of the Member State to whose legislation that person was last subject. Article 21 Reg. No. 987/2009 Obligations of the employer (1) An employer who has his registered office or place of business outside the competent Member State shall fulfil all the obligations laid down by the legislation applicable to his employees, notably the obligation to pay the contributions provided for by that legislation, as if he had his registered office or place of business in the competent Member State. (2) An employer who does not have a place of business in the Member State whose legislation is applicable and the employee may agree that the latter may fulfil the employer’s obligations on its behalf as regards the payment of contributions without prejudice to the employer’s underlying obligations. The employer shall send notice of such an arrangement to the competent institution of that Member State.

I. Spirit andPurpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Attachment to the employment relation (Art. 11 (3) (a)) . . . . . . . . . . . . 2. Special provisions for seamen (Art. 11 (4)). . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Special provisions for flight and cabin crew members (Art. 11 (5)) 4. Special provisions for civil servants and persons treated as such (Art. 11 (3) (b)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Special provisions for persons called up or recalled for service in the armed forces or for civilian service (Art. 11 (3) (d). . . . . . . . . . . . . . 6. Provisions for any other person (Art. 11 (3) (e)) . . . . . . . . . . . . . . . . . . . . .

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I. Spirit andPurpose

Art. 11 contains the general conflict rules of the Regulation. Para. 1 regulates 1 the principle that persons to whom the Regulation applies shall be subject to the legislation of a single Member State only. This is a principle of intergovernmental and supranational social security law which can differ from national conflict rules. This principle avoids that migrant workers are left without social protection and it also prevents the accumulation of benefits with the same purpose due to legislation of several Member States as well as it prevents the double payment of contributions due to double insurance. The principle also means that reference to the legislation of a certain Member State comprises all the branches of social security that are covered by the Regulation. The applicable legislation with regards to health care insurance of a (self-) employed person cannot differ from the applicable legislation with regards to pension insurance. With regards to the problem of double insurance, the CJEU decided in 1977 2 that according to Art. 13 of Reg. No. 1408/71 – now Art. 11 – the State of residence is not authorized to collect contributions from the salary according to its social security legislation if the employed person pursues his work activity in another Member State and is therefore covered by this Member State’s social security legislation (CJEU, Case C-102/76 (Perenboom), EU:C:1977:71). In the case decided, the person in question only pursued activities temporarily in GerHeinz-Dietrich Steinmeyer

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many in the relevant year and kept his residence in the Netherlands. The Dutch institution based its calculation on an annual contribution and did not want to include the income earned in Germany. It is open to question whether the double burden of contributions for part of the year resulting from this situation has to be accepted if the insured person enjoys advantages in terms of the calculation of benefits due to taking the whole year into account. This was indicated by the CJEU in 1967 when it stated in a decision to Reg. No. 3 that a competitive application of the legislation of Member States was not admissible if this lead to an increase of contributions for the employee or his employer without equally offering improvements of social protection (CJEU, Case C-19/67 (van der Vecht), EU:C:1967:49). The comparison of the two decisions shows that under Reg. No. 1408/71, the CJEU wanted to apply the principle of the application of the legislation of only one Member State consequently, especially since a reliable evaluation of whether there is an advantage corresponding to the higher burden is hardly possible. With regards to the average burden of contributions of employees in the Member States, this advantage would have to be bought too dearly. This reasoning can be transferred easily to Art. 11. The additional application of legislation of one Member State in which the person concerned does neither live nor work is not unproblematic if this does not lead to additional contributions (CJEU, Case C-92/63 (Nonnenmacher), EU:C:1964:40). Art. 11 also covers the situation in which an employed person who lives in the territory of one Member State and due to his employment with an employer who is situated on another Member State only pursues activities outside of the Member State. In this situation, the legislation of the State of employment is decisive (CJEU, Case C-60/93 (Aldewereld), EU:C:1994:271). 3 It is not compatible with the principle of avoidance of double contributions if a national provision applies a general social contribution to work-related and substitute earnings of employed and self-employed persons who live in the concerned Member State but who are not governed by the legislation of that Member State due to the conflict rules of the Regulation (CJEU, Case C-169/98 (Commission/France), EU:C:2000:85). This Case was about the French social contribution CSE that does not entitle to benefits. If this contribution was qualified as a tax, a connection to the place of residences would be permissible. As this social contribution serves the financing of the social security system, the CJEU declared it correctly as a contribution to the social security system that is subject to the prohibition of double contribution. This also applies to the French social debt repayment contribution CRDS (CJEU, Case C-34/98 (Commission/ France), EU:C:2000:84) and the Belgian reduction contribution. The latter does not face a direct and equivalent entitlement to benefits but it serves the financing of the old-age and survivors’ pension scheme of the Belgian social security system for self-employed persons (CJEU, Case C-249/04 (Allard), EU:C: 2005:329). However, it is up to the Member State to determine the basis of assessment of these contributions. The Member State can therefore exclude in-

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come earned in another Member State, e.g. to prevent double taxation in the area of income tax (CJEU, Case C-103/06 (Derouin), EU:C:2008:185). Thus, bilateral agreements that are tax-related are de facto given priority over the provisions of the Regulation. The social contribution for artists in Germany written down in Art. 24 KSVG has to be evaluated differently (CJEU, Case C-68/99 (Commission/Germany), EU:C:2001:137). This contribution has not to be paid by the artists and publicists themselves but by the enterprises that market the work. The enterprises are furthermore not entitled to pass the costs that result out of the contribution onto the earnings that they pay the artists and publicists. In this special case, the CJEU made an exception. The principle laid down in this provision is not only meant to prevent double 4 contributions, but also ensure that the social protection of migrant workers is complete (CJEU, Case C-2/89 (Kits van Heijningen), EU:C:1990:183). It might occur that the exclusive application of the legislation of only one Member State leads to disadvantages for the migrant workers. This could, for example, be the case if the reference to one single legislation of one Member State by the legislation of another member state causes the exclusion of invalidity benefits according to the provisions of the latter Member State. Thus, the Dutch institution refused to pay invalidity benefits because due to Dutch legal provisions, a person is not covered by the general law on incapacity for work (AAW) if he resides within the territory of the State and receives certain benefits according to foreign legal provisions. This caused that the concerned person could not receive invalidity benefits that he would have gotten based on Dutch legal provisions only. The CJEU held that in this situation, the principle of applicability of only one national legal system has to be maintained (CJEU, Case C-302/84 (Ten Holder), EU:C:1986:242). It held that the national legislator does not have the competence to determine the scope and the conditions for the application of its national legislation in relation to other Member States. The Community law has priority. The principle that the application of Reg. No. 1408/71 (now Reg. No. 883/2004) must not lead to the loss of entitlements that a person acquired only according to the legislation of one Member State (CJEU, Case C-24/75 (Petroni), EU:C: 1975:129) laid down by the Court of Justice does not stand in the way of this result. The CJEU held in the decision from 1986 that this principle which is also called “Petroni principle” only applies in cases of cumulation of benefits due to legal provisions of several Member States, but does not apply to the conflict rules. This reasoning of this decision is convincing, but the result is unsatisfactory. The “Petroni principle” is justified by Art. 42 EC, now Art. 48 TEU. This provision shall only cover those cases in which the aggregation of periods of time is necessary for the acquisition and maintenance of the entitlement and the calculation of the benefits. Then, the principle of the application of only one legal system remains applicable. In this situation, the legal provisions of several Member States would need to be applied in parallel to avoid the result specified above. Heinz-Dietrich Steinmeyer

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As the principle of prevention of double contributions results out of the right to the freedom of movement and as it aims to exclude disadvantages for those who make use of this possibility, it does not preclude the receipt of family benefits according to national provisions of the State of residence if the person concerned underlies the social security scheme of the State of residence according to Art. 11 (3) (a). The State of residence should not be prevented from granting benefits by this provision (CJEU, Case C—352/06 (Bosmann), EU:C:2008:290). This decision is not supposed to lead to the application of a second legal system, but it only expresses that Member States are free to grant additional benefits as long as they meet the requirements of the primary law. The decision does not lead to the creation of a new paradigm for the system of coordination (different opinion Jorens, Think Tank Report 2008, p. 27). Therefore, the Member State, which is not designated under the conflict rules as being the competent State is not precluded from granting family benefits to employed persons who pursue activities only temporarily within its territory if, first, neither the employed person nor the child for whom the benefit is claimed habitually resides within the territory of the Member State. Second, the employed person must not have suffered any legal disadvantage by reason of the fact that he has exercised his freedom of movement and if the person has or might have an entitlement to child benefits in the competent Member State (CJEU, Cases C-611/10 and C-612/10 (Hudzinski and Wawrzyniak), EU:C:2012:339). 6 The principle laid down in Art. 11 cannot apply in full, which is already shown by the mentioning of Art. 12 to 16 in Art. 11 (3) sentence 1. Art. 12 deals with the temporary performance of work as an employed or self-employed person in another Member State. Art. 13 addresses the pursuit of activities as an employed and / or a self-employed person in two or more Member States. There might occur comparable situations with regards to voluntary insurance or optional continued insurance (Art. 14). Sentence 2 of para. 1 has only a declaratory meaning. It clarifies that the applicable national legislation is determined by Title II of the Regulation. This cannot be interpreted as a reference to individual provisions of the national legal system of one Member State, but as a conflictof-law reference to the national legislation that is applicable to the life situation in question. 7 Whereas para. 1 only shows the basic understanding of the conflict rules of the Regulation, para. 2 contains a provision that facilitates the allocation of recipients of cash benefits. Para. 3 and para. 4 contain general provisions for the decisive connection. These provisions might be overruled by deviating provisions of the Regulation. The CJEU state in a decision from 1984 (CJEU, Case C-101/83 (Brusse),EU:C:1984:187) with regards to this matter: “In fact, in certain specific situations the unreserved application of the rule set out in Article 13 (2) (a) might create, instead of prevent, administrative complications for workers as well as for employers and social security authorities, which would entail delays in the forwarding of employees’ files and, therefore, place obstacles in the 5

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way of their freedom of movement. Special rules governing such situations are set out in Articles 14 to 16.” Para. 2 contains a provision on presumption that is intended to lighten the 8 procedure. It is only necessary to find out if the concerned person receives cash benefits that are granted on the basis of an existing employment relation or a pursued self-employed activity. In this case, the cash benefit rightly indicates the employment or self-employment. This shall not apply to continuous benefits, which is shown by para. 2. II. Commentary 1. Attachment to the employment relation (Art. 11 (3) (a))

Para. 3 (a) declares the place of performance of work to be the general attach- 9 ment factor for employed persons. This attachment provision applies to all employed persons that receive wages or salaries. The term employment has to be defined according to Community law and not national law (for a different position see Art. 1 para. 4). This provision regulates therefore the principle of the State of employment and it makes an important fundamental decision for the whole supranational coordinating social security law. The decision in favour of this principle is consistent and correct for those social security schemes that nationally attach to the employment relation as well. This is for example the case in the German social insurance system. On the other hand, the application of this principle causes problems in those States in which the residence or habitual residence is decisive. This problem occurs for example with regards to family benefits that are regulated in Art. 67 et seq. The purpose of the conflict rules is to determine under several possible at- 10 tachment factors the decisive attachment factor. Therefore, para. 2 (a) states that the attachment to the place of employment is decisive even if the person lives in another Member State. The principle of the State of employment takes priority over the principle of the State of residence (cf. CJEU, Case C-102/76 (Perenboom), EU:C:1977:71). This also means that a person that performs work in one Member State and lives in another Member State cannot be excluded from the system of the first Member State by demanding that the person lives within the territory of that Member State. In those Cases, Art. 11 (3) (a) leads to the application of the principle of the State of employment rather than the principle of the State of residence (CJEU, Case C-2/89 (Kits van Heijningen), EU:C:1990:183). The Regulation derogates from the general principle of attachment to the State of employment in favour of the principle of attachment to the State of residence only in specific situations and on grounds of practicality and efficacy which render an attachment to the State of residence more appropriate and more in conformity with the interests of the person concerned (cf. CJEU, Case C-58/87 (Rebmann), U:C:1988:344).

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The provision also gives priority to the principle of the State of employment over the principle of the State of establishment. While Reg. No. 1408/71 declared the place of employment to be decisive if the employer or the undertaking employing the employed person had his residence or its registered office or place of business in another Member State, the Reg. No. 883/2004 does not regulate this situation explicitly but this does not lead to a change of the legal situation. This becomes visible in the CJEU’s decision Salemink (CJEU, Case C-347/10 (Salemink), EU:C:2012:17). The Court also derives this priority from Art. 45 TFEU. This applies not only to persons that are employed but also to those only working temporarily and on a voluntary basis. 12 However, it is, according to the judgments of the CJEU, for the legislature of each Member State to lay down the conditions creating the right or the obligation to become affiliated to a social security scheme or to a particular branch under such a scheme provided (CJEU, Case C-110/79 (Coonan), EU:C:1980:112). Out of this opinion, the CJEU drew in a subsequent decision (CJEU, Case C-275/81 (Koks), EU:C:1982:316) the conclusion that a Dutch social security provision which provides that a married woman residing in the Netherlands whose husband is not insured there for the purpose of an old-age pension because he is insured under the legislation of another Member State – in this case Germany –, is not insured for those purposes either even if she has been employed in the Netherlands, is not incompatible with the provisions of Community law. Besides from the fact that this difference in treatment is not compatible with the Directive 79/7/EEC on the progressive implementation of the principle of equal treatment for men and women in matters of social security, the decision of the Court of Justice is questionable as the provision in question constitutes an obstacle to the freedom of movement of migrant workers due to the disadvantages resulting out of the provision. But the Court of Justice also stated that national provisions must not lead to the exclusion of a person from the scope of those provisions if this person falls within the scope of Reg. No. 1408/71 (CJEU, Case C-2/89 (Kits van Heijningen), EU:C:1990:183). This clarifies that the Community’s conflict rules cannot be overridden by the Member States. 13 In accordance with the wording, Art. 11 (3) (a) makes a decision according to the place where the employed person pursues his activities. It does not matter if the employment is a part-time or full-time employment as the Regulation does not indicate that certain groups of persons should be excluded from the scope of the Regulation due to the extent of time of the employment. This means that the person concerned is subject to the legislation of the State of employment both on the days on which he pursues the activity and on the days on which he does not (CJEU, Case C-2/89 (Kits van Heijningen), EU:C:1990:183). This was problematic in the Case decided by the Court because the person concerned lived in Belgium and worked in the Netherlands. 14 The case of a worker who was not employed at the time of claiming benefits, e.g. in case of an illness, was regulated differently under Reg. No. 1408/71. In 11

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those cases the former Art. 13 (2) (f) stipulated the application of the principle of the State of residence. Now, Art. 11 (2) stipulates for those cases the attachment to the State of employment or State of work performance as long as the benefit is not a continuous benefit. With regards to other benefits, it is clear from the nature of the benefit that they are provided due to an employment relationship or a self-employment. Art. 11 (3) (b) contains a deviant attachment for civil servants. They shall be subject to the legislation of the Member State to which the administration employing him is subject. Art. 11 (3) (c) covers the case in which a person receives unemployment benefits according to the legislation of the State of residence in accordance with Art. 65. A wholly unemployed person who, during his last activity as an employed or self-employed person, resided in a Member State other than the competent Member State and who continues to reside in that Member State or returns to that Member State shall make himself available to the employment services in the Member State of residence. As a consequence, Art. 13 (3) (c) stipulates that this person is subject to the legislation of the State of residence. At first, Reg. No. 1408/71 according to its wording was only applicable to workers and their family members moving within the Community. The explicit inclusion of self-employed persons only took place with Reg. No. 1390/81 (OJ 1981, L 143/1). In 1968, the CJEU already broadened the personal scope of application of the former Reg. No. 3 to self-employed persons, in this case to a craftsman (CJEU, Case C-19/68 (de Cicco), EU:C:1968:56). One must find a conflict-of-law attachment that equals the attachment to the employment for employed persons. Reg. No. 883/2004 now brings employed and self-employed persons together in one provision and it does not contain special provisions for self-employment any more. Art. 11 (3) (a) attaches to the place of work performance if the legal provisions of the Member State in which the self-employment is pursued are considered as being decisive. This attachment is the counterpart to the attachment to the place of employment if an employed person is concerned. The principle of the State of residence is subsidiary in case of self-employment, just as it is in case of employment. The legal provisions of the State in which the self-employed person pursues his activities exclusively apply. This also applies, as it is the case with employed persons, if this leads to disadvantages in comparison to the simultaneous application of legal provisions of two Member States. This is for example the case if a self-employed person living in the Netherlands working in Belgium does not receive Dutch family allowances due to this reason (CJEU, Case C-60/85 (Luijten), EU:C:1986:307).

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2. Special provisions for seamen (Art. 11 (4))

For seamen, it is necessary, at least for reasons of clarification, to create a 19 regulation for the determination of the applicable legal system when pursuing an Heinz-Dietrich Steinmeyer

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activity on board a vessel at sea. The Regulation contains a provision in Art. 11 (4) stipulating the attachment according to the law of the flag as it is generally customary. Such an attachment has the disadvantage that that it does not cover those seamen whose vessels mostly operate in EU waters but are flying a flag of convenience. The attachment to the law of the flags also means that the flag State must not establish additional requirements for access if its legal system is applicable as long as they prevent that the conflict rule is fully effective (CJEU, Case C-196/90 (De Paep), EU:C:1991:381). On the other hand, this attachment also means that independently from the place of performance of the vessel – also of a so-called dredging-ship – the flag is decisive. This also overrules a national provision that additionally establishes a residence requirement (CJEU, Case C-106/11 (Bakker), EU:C:2012:328). 20 Art. 11 (4) does not only apply to those seamen who are to be qualified as employed persons but also for self-employed persons pursuing activities on board a vessel. 21 Given that the flag flown by a vessel and the registered office or place of business of the employing undertaking or employer can differ in case of activities pursued on board of a vessel, Art. 11 (4) sentence 2 stipulates that the legal provisions of the State of the registered office or place of business apply as long as the concerned employed or self-employed person lives in that Member State. The employing undertaking or employer of seamen that grants the remuneration does not necessarily have to have its registered office or place of business in the Member State whose flag is flown by the vessel and where the seamen perform their work. The principle of the State of residence applies subsidiarily. The provision does not regulate the situation in which the person concerned does not live in the Member State in which the remuneration-paying undertaking or person has its registered office or place of business or in case of a person has its residence. In those cases the legal provisions of the flag State are applicable as the general provision of Art. 11 (3) (a) in conjunction with Art. 11 (4) has to be applied due to the lack of a special provision. Para. 4 only concerns situations in which the remuneration-paying undertaking has its registered office or place of business in one of the Member States of the EU and in which the vessel flies the flag of a Member State. The cases of so-called flags of convenience are not covered. The provision clarifies that in cases of para. 4 in which the attachment relates to the place of residence the undertaking or person paying the remuneration shall be considered as the employer for the purposes of the said legislation. Furthermore, the registered office or place of business of the paying undertaking prevail the flag State. 22 The allocation and therefore the determination of the decisive employing undertaking can be difficult in the individual situation. Therefore, Art. 11 (4) sentence 3 stipulates that the undertaking or person paying the remuneration shall be considered as the employer.

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3. Special provisions for flight and cabin crew members (Art. 11 (5))

Civil aviation is an area of high-degree mobility, also for the personnel in- 23 volved. Numerous airlines operate throughout Europe when deploying flight and cabin crew members and deploy them from different locations. The legal attachment in terms of social insurance law causes problems in cross-border cases with regards to the decisive place of employment. In those cases, it was discussed whether Art. 13 had to be applied. This provision stipulates that the legislation of the Member State of residence has to be applied if the concerned person pursues a substantial part of his activity in that Member State. The application of Art. 13 leads to a frequent change of the applicable legal system based on the operational plans of the airlines, depending on the amount of time the employed person pursued activities in the Member State of residence. The airlines therefore had the possibility to get to the application of social security systems in their favour if they arranged the operational plans in certain ways. Now, the modification of the Regulation that was introduced by Reg. No. 465/2012 creates more continuity and security by introducing the attachment to the home base. According to Annex III Section Q OPS 1.1095 (1.7) of Reg. No. 3922/91, “home base” is the place determined by the airline company where the crew member usually starts and finishes his work period or a series of work periods and where the airline company is usually not responsible for the accommodation of the crew member concerned. 4. Special provisions for civil servants and persons treated as such (Art. 11 (3) (b))

According to Art. 45 (4) TFEU (former Art. 39 (4) EC), the obligation to es- 24 tablish the freedom of movement does not apply to employment in the public service. The scope of this exception is disputed (cf. Battis, Freizügigkeit und Beschäftigung in der öffentlichen Verwaltung, in: Magiera (ed.), Freizügigkeit und soziale Rechte in einem Europa der Bürger, Baden-Baden 1990, p. 47 et seq.). The CJEU seems to have a tendency to restrict this exception to the core of public service by excluding those authorities from the scope of application Art 45 (1) to (3) that “involve direct or indirect participation in the exercise of powers conferred by public law and duties designed to safeguard the general interests of the State or of other public authorities” (CJEU, Case C-149/79 (Commission/Belgium), EU:C:1980:297; established case law). The case law of the CJEU already gave grounds for inclusion of the special social security schemes for civil servants under the former Reg. No. 1408/71 (cf. CJEU, Case C-443/93 (Vougioukas), EU:C:1995:394; CJEU, Case C-227/94 (Olivieri-Coenen), EU:C: 1995:332; Steinmeyer, Europäische Rechtsprechung und Gesetzgebung im Grenzbereich von Arbeits- und Sozialrecht in: Liber Amicorum Krasney, 1997, p. 567 et seq.). Therefore, Reg. No. 1606/98 from 29.06.1998 abolished this exclusion and this was taken over by Reg. No. 883/2004 (cf. with detailed explana-

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tions to the inclusion of civil servants in the scope of application of Reg. No. 1408/71: Art. 4 para. 43 et seq. and Steinmeyer, in: Hanau/Steinmeyer/Wank (ed.), Handbuch des europäischen Arbeits- und Sozialrechts, 2002, § 25). 25 Art. 11 (3) (b) stipulates that the legislation of the State of employment applies by referring to the administration employing the person. Thus, the Regulation draws conclusions form the principle of the State of employment for this group of persons. Differing from Reg. No. 1408 /71, the provision does not attach to the seat of the authority but the administration. Therefore, the term authority is not decisive but a less formal term that focuses on the organizational unit. However, it is not decisive where the administration is located but whose Member State it has to be allocated to. The legislation of that Member State is thus also applicable if the activities are pursued in another Member State. Like that, the entire legislation on contribution and benefits of the State of stay is inapplicable so that for example a civil servant posted to Germany by another Member State is not entitled to child allowances. The classification as civil servant depends on the national legislation of the Member State of the employing authority. A person who is, in a Member State, partly subject to the social security scheme for civil servants and partly to the scheme for employed persons may thus be subject to the legislation of the Member State to which the administration is subject, this legislation is decisive for the determination of the applicable legislation (CJEU, Case C-296/09 (Baesen), EU:C:2010:755). This decision, whose central message is a bit unclear, has to be understood in such way that this principle established by the Court applies in all cases in which the status as civil servant is prevailing. 26 The provision serves the purpose of clarification, as civil servants are to be considered as employed persons under the Regulation (CJEU, Case C-71/93 (Van Pouke), EU:C:1994:120). Art. 11 (3) (b) is not applicable to persons who have definitely stopped working for the administration of a Member State and for example have gone to reside with their spouse in another Member State in which they have no occupation and are not covered by any social security scheme in any other capacity (CJEU, Case C-245/88 (Daalmeijer), EU:C: 1991:66). The provision is only designated to cover those cases in which the place of residence and place of employment are situated in different Member States during the same period of time. 27 Art. 11 (3) (b) also applies to a case in which a civil servant is employed by the administration of a Member State, performs his work in another Member State and at the time of termination of the employment contract is treated with retroactive effect by the first Member State as if he had pursued his activity as an employed person and not as a civil servant intended to give him the right to unemployment benefit and cover by the sickness and invalidity-insurance legislation. This special procedure does not prevent Art. 11 (3) (b) from being applied (CJEU, Case C-308/94 (Naruschawicus), EU:C:1996:28).

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5. Special provisions for persons called up or recalled for service in the armed forces or for civilian service (Art. 11 (3) (d)

There is no employment relationship if a person is called up or recalled for 28 service in the armed forces or for civilian service. In this case, the concerned person fulfils a public duty. Therefore, it was necessary to create a special provision regulating this situation. Here, it becomes clear that the legislator sticks to the principle of the State of employment. The relationship resulting out of the call-up of a person is declared decisive and replaces the relationship of employment. Art. 11 (3) (d) only applies to those persons who fulfil their obligation of mili- 29 tary or civilian service. The provision is not applicable to professional and temporary soldiers. They are covered by the different special provisions for civil servants. Typically, the State provides a continuing social protection within its general 30 social security scheme if a person fulfils such a public obligation. For example, in Germany, the legislation stipulates that an employment relation has to be treated as if it was not interrupted by military or civilian service. This only applies as long as the person fulfils the obligation of military or civilian service, after that time, the general provisions apply (CJEU, Case C-372/02 (Adanez-Vega), EU:C:2004:705). 6. Provisions for any other person (Art. 11 (3) (e))

The judgment delivered by the CJEU in Case C-302/84 (Ten Holder, EU:C: 31 1986:242) made under Reg. No. 1408/71 proved that it was necessary to insert a new subparagraph in Reg. No. 1408/71 to determine which legislation is applicable to persons to whom one Member State’s legislation ceases to be applicable without the legislation of another Member State becoming applicable. It was found that the insertion of a new subparagraph was necessary to stipulate “that persons to whom the legislation of a Member State ceases to apply without the legislation of another Member State becoming applicable to them shall be subject to the legislation of the Member State in whose territory they reside” (OJ L 206/2, 29.07.1991). The judgment delivered in Ten Holder was about the conflict-of-law allocation after termination of an employment relationship. The Court decided in favour of a continued application of the legislation of the Member State in which he was last employed even if the person concerned lives in another Member State. Art. 11 (3) (e) differs from this and stipulates the application of the principle 32 of the State of employment as it constitutes a standard rule. Subparagraph (e) names as a condition that there is a person concerned to whom subparagraphs (a) to (d) do not apply. This can only mean that an employment relationship or another relationship mentioned in paragraph (3) that leads to the application of a certain national legislation does not exist (any more).

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This person is subject to the legislation of the State of residence, but subject to other provisions of the Regulation guaranteeing him benefits under the legislation of one or more other Member States. This second part of the provision shows the subsidiarity of this conflict rule. It can only apply if the other general conflict rules or other provisions of the Regulation do not contain a different provision for the attachment in the specific case. Apart from conflict rules, subparagraph (e) seems to allow that benefits are granted by several states according to other rules. Before applying the principle of the State of residence according to subparagraph (e), it has to be examined if the case is covered by one of those other rules. 34 Subparagraph (e) also expresses that in general, only the legislation of the State of residence applies in terms of the applicable legislation. This is insofar in accordance with paragraph (1) as it is ensured that the legislation of only one Member State is applicable. As a consequence, a person residing in a Member State and unemployed there after performing his compulsory military service in another Member State is subject to the legislation of the Member State of residence(CJEU, Case C-372/02 (Adanez-Vega), EU:C:2004:705). After the termination of the military service, the legislation of the other States was not applicable any more so that it was necessary to use the attachment written down in Art. 11 (3) (e). If, in those cases, the legislation only offers a voluntary insurance, it has to be made sure that the conditions relating to voluntary insurance, in respect of the branches for which compulsory insurance has ceased, are not less favorable than those relating to compulsory insurance. (CJEU, Case C-227/03 (van Pommeren-Bourgondien), EU:C:2005:431). 35 However, it is questionable how the situation of the Case Kits van Heijningen (CJEU, Case C-2/89, EU:C:1990:183) has to be evaluated in this context. The Case was about the consideration of times without performance of work. The key aspect was that of the amount of time which a person devotes to his activities has to be disregarded. Art. 11 (3) (e) has not changed the validity of this statement so that these cases remain unaffected by the provision. This was clarified and generalized in the Case Kuusijärvi (CJEU, Case C-275/96 (Kuusijärvi), EU:C:1998:279). According to this decision, Art. 13 (2) (f) of Reg. No. 1408/71 covers any situation in which the legislation of a Member State ceases to be applicable to a person, for whatever reason, and not only because the person concerned has ceased his occupational activity, be it definitively or temporarily, in a given Member State. The provision is supposed to ensure the complete coverage. These thoughts can be transferred to Art. 11 (3) (e) of the new Regulation. The CJEU confirmed its point of view in a Case in which a migrant worker was transferred, as a prisoner, from one Member State to another Member State to serve the remainder of his sentence. In this Case, the CJEU declared, relying on this provision, that the legislation of the first Member State – that State where he started to serve his sentence - applies (CJEU, Case C-302/02 (Effing), EU:C: 2005:36). However, it has to be noted that subparagraph (e) is only a provision 33

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about the attachment factor and it does not itself define the conditions in which the legislation of a Member State ceases to be applicable (CJEU, Case C-347/98 (Commission/Belgium), EU:C:2001:236). This also applies to family members that do not pursue economic activities 36 themselves if they do not participate in the insurance status of a family member. The standard rule is also applicable if a person leaves the former State of employment after the termination of an employment relationship, even if the person tries to find an employment in the former State of employment to pursue his activities as a frontier worker. This results out of a clear demarcation and Art. 45 TFEU does not require a different treatment (differing opinion Schreiber, in: Schreiber/Wunder/Dern, Art. 11 para. 24). Using Art. 13 (2) (f) of Reg. No. 1408/71 (now Art. 11 (3) (e)) as an example, 37 the CJEU ruled (CJEU, Case C-372/02 (Adanez-Vega), EU:C:2004:705) that the general conflict rules in Title II for determining the 'legislation applicable' – that constitute a complete system of conflict rules –are in certain areas however subject to exceptions (see to that effect CJEU, Case C-58/87 (Rebmann), EU:C: 1988:344). It is plain from the scheme of Reg. No. 1408/71 that the application of those special rules governing connecting factors none the less presupposes the prior determination of the applicable legislation in accordance with the provisions of Title II of that Regulation. Therefore, it is necessary to determine first of all which is the applicable legislation under the general rules governing connecting factors in Title II of the Regulation and in a second step, it is necessary to decide whether the special rules governing connecting factors in the Regulation – here Art. 71 (1) (b) (ii) Reg. No. 1408/71 (= Art. 65 (2) and (4)) – provide for the application of any other legislation. In the particular case, it had to be decided if a person residing in a Member State and unemployed there after performing his compulsory military service in another Member State and being subject to its legislation during that time (Art. 13 (2) (e) Reg. No. 1408/71 = Art. 11 (3) (d)) is subject to the legislation of the Member State of residence according to Art. 13 (2) (f) Reg. No. 1408/71 (= Art. 11 (3) (e)). Then it also had to be determined whether Article 71(l) (b) (ii) of Reg. No. 1408/71 (= Art. 65 (2) and (4)) applied which was the case. In this particular case, the application of this provision also led to the application of the legislation of the State of residence.

Article 12 Special rules (1) A person who pursues an activity as an employed person in a Member State on behalf of an employer which normally carries out its activities there and who is posted by that employer to another Member State to perform work on that employer's behalf shall continue to be subject to the legislation of the first Member State, provided that the an-

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Part 2: Regulation (EC) No 883/2004 ticipated duration of such work does not exceed 24 months and that he/she is not sent to replace another person. (2) A person who normally pursues an activity as a self-employed person in a Member State who goes to pursue a similar activity in another Member State shall continue to be subject to the legislation of the first Member State, provided that the anticipated duration of such activity does not exceed 24 months. Article 14 Reg. No. 987/2009 Details relating to Articles 12 and 13 of the basic Regulation (1) For the purposes of the application of Article 12(1) of the basic Regulation, a ‘person who pursues an activity as an employed person in a Member State on behalf of an employer which normally carries out its activities there and who is posted by that employer to another Member State’ shall include a person who is recruited with a view to being posted to another Member State, provided that, immediately before the start of his employment, the person concerned is already subject to the legislation of the Member State in which his employer is established. (2) For the purposes of the application of Article 12(1) of the basic Regulation, the words ‘which normally carries out its activities there’ shall refer to an employer that ordinarily performs substantial activities, other than purely internal management activities, in the territory of the Member State in which it is established, taking account of all criteria characterising the activities carried out by the undertaking in question. The relevant criteria must be suited to the specific characteristics of each employer and the real nature of the activities carried out. (3) For the purposes of the application of Article 12(2) of the basic Regulation, the words ‘who normally pursues an activity as a self-employed person’ shall refer to a person who habitually carries out substantial activities in the territory of the Member State in which he is established. In particular, that person must have already pursued his activity for some time before the date when he wishes to take advantage of the provisions of that Article and, during any period of temporary activity in another Member State, must continue to fulfil, in the Member State where he is established, the requirements for the pursuit of his activity in order to be able to pursue it on his return. (4) For the purposes of the application of Article 12(2) of the basic Regulation, the criterion for determining whether the activity that a self-employed person goes to pursue in another Member State is ‘similar’ to the self-employed activity normally pursued shall be that of the actual nature of the activity, rather than of the designation of employed or self-employed activity that may be given to this activity by the other Member State. (5) For the purposes of the application of Article 13(1) of the basic Regulation a person who ‘normally pursues an activity as an employed person in two or more Member States’ shall refer to a person who simultaneously, or in alternation, for the same undertaking or employer or for various undertakings or employers, exercises one or more separate activities in two or more Member States. 5 a. For the purposes of the application of Title II of the basic Regulation, ‘registered office or place of business’ shall refer to the registered office or place of business where the essential decisions of the undertaking are adopted and where the functions of its central administration are carried out. For the purposes of Article 13(1) of the basic Regulation, an employed flight crew or cabin crew member normally pursuing air passenger or freight services in two or more Member States shall be subject to the legislation of the Member State where the home base, as defined in Annex III to Council Regulation (EEC) No 3922/91 of 16 December 1991 on the harmonization of technical requirements and administrative procedures in the field of civil aviation ( 6 ), is located. 5 b. Marginal activities shall be disregarded for the purposes of determining the applicable legislation under Article 13 of the basic Regulation. Article 16 of the implementing Regulation shall apply to all cases under this Article. (6) For the purposes of the application of Article 13(2) of the basic Regulation, a person who ‘normally pursues an activity as a self-employed person in two or more Member States’ shall refer, in particular, to a person who simultaneously or in alternation pursues one or more separate self-employed activities, irrespective of the nature of those activities, in two or more Member States. (7) For the purpose of distinguishing the activities under paragraphs 5 and 6 from the situations described in Article 12 (1) and (2) of the basic Regulation, the duration of the activity in one or more other Member States (whether it is permanent or of an ad hoc or temporary nature) shall be decisive. For these purposes, an overall assessment shall be made of all the relevant facts including, in particular, in the case of an employed person, the place of work as defined in the employment contract. (8) For the purposes of the application of Article 13 (1) and (2) of the basic Regulation, a ‘substantial part of employed or self-employed activity’ pursued in a Member State shall mean a quantitatively substantial part of all the activities of the employed or self-employed person pursued there, without this necessarily being the major part of those activities. To determine whether a substantial part of the activities is pursued in a Member State, the following indicative criteria shall be taken into account:

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Article 12 (a) in the case of an employed activity, the working time and/or the remuneration; and (b) in the case of a self-employed activity, the turnover, working time, number of services rendered and/or income. In the framework of an overall assessment, a share of less than 25 % in respect of the criteria mentioned above shall be an indicator that a substantial part of the activities is not being pursued in the relevant Member State. (9) For the purposes of the application of Article 13 (2) (b) of the basic Regulation, the ‘centre of interest’ of the activities of a self-employed person shall be determined by taking account of all the aspects of that person’s occupational activities, notably the place where the person’s fixed and permanent place of business is located, the habitual nature or the duration of the activities pursued, the number of services rendered, and the intention of the person concerned as revealed by all the circumstances. (10) For the determination of the applicable legislation under paragraphs 8 and 9, the institutions concerned shall take into account the situation projected for the following 12 calendar months. (11) If a person pursues his activity as an employed person in two or more Member States on behalf of an employer established outside the territory of the Union, and if this person resides in a Member State without pursuing substantial activity there, he shall be subject to the legislation of the Member State of residence. Article 15 Reg. No. 987/2009 Procedures for the application of Article 11 (3) (b) and (d), Article 11 (4) and Article 12 of the basic Regulation (on the provision of information to the institutions concerned) (1) Unless otherwise provided for by Article 16 of the implementing Regulation, where a person pursues his activity in a Member State other than the Member State competent under Title II of the basic Regulation, the employer or, in the case of a person who does not pursue an activity as an employed person, the person concerned shall inform the competent institution of the Member State whose legislation is applicable thereof, whenever possible in advance. That institution shall issue the attestation referred to in Article 19(2) of the implementing Regulation to the person concerned and shall without delay make information concerning the legislation applicable to that person, pursuant to Article 11(3)(b) or Article 12 of the basic Regulation, available to the institution designated by the competent authority of the Member State in which the activity is pursued. (2) Paragraph 1 shall apply mutatis mutandis to persons covered by Article 11 (3) (d) of the basic Regulation. (3) An employer within the meaning of Article 11 (4) of the basic Regulation who has an employee on board a vessel flying the flag of another Member State shall inform the competent institution of the Member State whose legislation is applicable thereof whenever possible in advance. That institution shall, without delay, make information concerning the legislation applicable to the person concerned, pursuant to Article 11 (4) of the basic Regulation, available to the institution designated by the competent authority of the Member State whose flag, the vessel on which the employee is to perform the activity, is flying.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. The provision on the posting of employed persons (Art. 12 (1)). . . . 2. Provisions for self-employed persons (Art. 12 (2)) . . . . . . . . . . . . . . . . . .

1 4 4 21

I. Spirit and Purpose

Art. 12 is designed as an exemption to Art. 11 (3) (a). On one hand, it consti- 1 tutes, like Art. 11 (2) (b) to (e), a modification to the principle of the State of employment by determining exceptions from the attachment to the employment relationship. On the other hand, Art. 12 does not treat special activities differing from the typical employment relationship like Art. 11 (3) (b) to (e) do but it does concern the typical employment relationship and regulates different case scenarios that can occur in cross-border cases. While Art. 11 (3) (a) treats employment and self-employment equally, Art. 12 (1) only treats employed persons and para. 2 contains a special provision for self-employed persons. Art. 11 (3) (a) shows that in cases involving employed persons receiving 2 wages or salaries within the territory of a Member State the place of employment is decisive. This is based on the fact that when attaching to the employ-

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ment relationship to determine the applicable national legal system, one has to focus on the core of the legal relationship. Such a construction determines the applicability of a national legislation by examining to which legal system the case is most closely linked. In case of a temporary performance of work in another Member State and in case of transport, the actual place of employment – unlike in other cases – shows the core of the employment relationship. Then, it becomes necessary to find another attachment factor. This is the purpose of Art. 12. 3 Paragraph 1 contains the typical provision on posting as it can be found in intergovernmental social security agreements (cf. for provisions on posting in national, international and supranational law Steinmeyer, Die Einstrahlung). A comparable provision can be found in labour law, namely the Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (cf. OJ L 18/1, 21.01.1997). This directive is the result of a partly controversial discussion (cf. Hanau, Das Arbeitnehmer-Entsendegesetz, NJW 1996, p. 1369 et seq.; Steinmeyer, Sozialdumping in Europa – Perspektiven einer arbeits- und sozialrechtlichen Rechtsprechung, DVBl. 1995, p. 962 et seq.). For labour law, one should also pay attention to Art. 8 (2) sentence 2 of Reg. No. 593/2008 (Rome I). II. Commentary 1. The provision on the posting of employed persons (Art. 12 (1))

The provision on posting states that even if a person who is employed in one Member State is posted to another Member State to perform work on that employer’s behalf, he shall continue to be subject to the legislation of the first Member State. The conditions for such a posting that follow out of this basic idea are as follows: 1. The existence of an employment relationship with an employer located in a Member State, 2. The fulfillment of the conditions of posting, 3. The continued existence of the employment relationship with the employer concerned during the posting and 4. the prior determination of a time limit. 5 As the continued employment relationship in the first Member State and not the actual place of work performance is decisive for the attachment, it is necessary to first check if there is an employment relationship with an undertaking in that Member State. To prevent misuse, Art. 14 (2) of Reg. No. 987/2009 stipulates that the words ‘which normally carries out its activities there’ shall refer to an employer that ordinarily performs substantial activities, other than purely internal management activities, in the territory of the Member State in which it is established, taking account of all criteria characterising the activities carried out by the undertaking in question. Generally, the Decision No. A 2 of the Administrative Commission applies which states that besides the place where the undertaking has its registered office and administration, one must also, for example, 4

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take the number of administrative staff working in the Member State in which the undertaking is established and in the other Member State, the place where the contracts with the workers are concluded, the place where the majority of contracts with clients are concluded and the turnover achieved in each Member State into consideration. The wording of the provision on posting of workers does not exclude an ap- 6 plication to cases in which a person is recruited with only a view to being posted. It can be doubted that those cases are still covered by the purpose of the provision (affirmative with regards to the application of the provision on those cases CJEU, Case C-19/67 (Van der Vecht), EU:C:1967:49). Decision No. 128 of the Administrative Commission stated that the provisions of Article 14 of Reg. No. 1408/71 – now Art. 12 (1) – shall also apply to a worker subject to the legislation of a Member State who is engaged in that Member State in which the undertaking has its registered office or place of business with a view to his posting to another Member State (OJ C 141, 07.06.1986). The reason given for the application was that the purpose of the provisions of Article 14 of Reg. No. 1408/71 is to avoid, both in respect of workers and of employers and social security institutions, the administrative complications which would result from the application of the general rule laid down in Article 13 (2) of the said Regulation in cases of short-term work performance in another Member State. This is certainly one of the provision’s purposes, but not its only one so that one can raise objections against this reasoning of the Administrative Commission. Still, its basic statements are correct as the employed person recruited only with view to his posting will usually be interested to stay in the social security scheme by which he was covered so far (cf. Steinmeyer, Die Einstrahlung, p. 86 et seq.). The Decision of the Administrative Commission requires that there continues to exist a direct relationship between that undertaking and the worker during his period of posting and that the undertaking normally carries out its activities in the Member State from which the worker was posted. Now, Art. 14 (1) of Reg. No. 987/2009 also stipulates that persons shall be included who are recruited with a view to being posted to another Member State, provided that, immediately before the start of his employment, the person concerned is already subject to the legislation of the Member State in which his employer is established. The person must have been subject to the legislation of this Member State for at least one month (Decision No. 2 of the Administrative Commission) to prevent the misuse of the provision. Posting means a change of location induced by the employer and being on his 7 behalf. A posting is therefore not given in situations involving local staff, i.e. those workers that were first recruited in another Member State. They are covered by the legislation of the Member State in which they have been hired. During the period of posting there has to be a continued employment relation- 8 ship to the posting undertaking. There needs to be a connection that outlasts the change of the place of work performance. This is also shown by the Regulation Heinz-Dietrich Steinmeyer

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in demanding that the employed person is posted on behalf of an employer to another Member State to perform work on that employer’s behalf. If Art. 11 (3) (a) makes a person subject to the legislation of the State of employment regardless the registered office of the employer or the undertaking, it can be concluded that with regards to Art. 12 (1), it cannot be decisive if the registered office of the employer or undertaking is located in the State from where the employed person is posted. Otherwise, it would not be possible to ensure the continuance of the insurance relationship to the social security authority of the State where the employed person used to be insured due to the general rule of Art. 11 (3) (a). 9 The existence of a continued connection can become questionable in those cases in which an employed person is posted to a subsidiary or a representative office. He can be integrated in a way that contradicts the continued connection to the former Member State’s system. The examination can be difficult in the individual case. It depends on whether there are more connections other than the affiliation to the group. One indication – that has to be treated carefully – is the continuous payment of remuneration by the posting undertaking. Another indication is the continuous bond to instructions of the posting undertaking. An important indication is the Regulation itself by claiming that the employed person must be posted to perform work. The posting to a subsidiary must therefore be about the fulfillment of a specific delimitable task. 10 Decision No. A 2 of the Administrative Commission (of 12 June 2009, OJ C 106/5) offers criteria that can be used under the new Regulation. According to the Decision, it is decisive that while the work is performed in the other Member State, there continues to exist a direct relationship between the worker and the employer that posted him. In order to establish whether such a direct relationship continues to exist, assuming therefore that the worker continues to be under the authority of the employer which posted him, a number of elements have to be taken into account, including responsibility for recruitment, employment contract, remuneration (without prejudice to possible agreements between the employer in the sending State and the undertaking in the State of employment on the payment to the workers), dismissal, and the authority to determine the nature of the work. Article 12(1) of Regulation No. 883/2004 shall continue to apply for posting of staff if the worker, posted by an undertaking in the sending State to an undertaking in the State of employment, is also posted to one or more other undertakings in the same State of employment, in so far as, however, the worker continues to carry out his work for the undertaking which posted him. Brief interruptions of the worker's activities with the undertaking in the State of employment, whatever the reason, shall not constitute an interruption of the posting period. Once a worker has ended a period of posting, no fresh period of posting for the same worker, the same undertakings and the same Member State can be authorized until at least two months have elapsed from the date of expiry of the previous posting period. However, the provisions shall not apply if the undertaking to which the worker has been posted places him at the disposal of another

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undertaking in the Member State in which it is situated. In this situation, there can no longer be any guarantee of maintaining the direct relationship. The provisions do not apply either if the worker is recruited in a Member State in order to be sent by an undertaking situated in a second Member State to an undertaking in a third Member State (Decision No. A 2 of the Administrative Commission). If a worker resides in a Member State and is employed by an undertaking in another Member State to be posted to a third Member State, Art 12 (1) applies if the worker has been subject to the legislation of the Member State in which the employer is established for at least one month (differing opinion under Reg. No. 1408/71 Joussen, NZS 2003, 19, 25; same opinion Schreiber, in: Schreiber/ Wunder/Dern, VO (EG) Nr. 883/04, Art. 12 para. 6). If employed persons of one undertaking are hired out to another undertaking 11 in another Member State within the EU, it has to be asked whether an employed person concerned has to be qualified as belonging to the undertaking engaging the worker or the hiring undertaking. The application of the provision on posting in the individual case depends on this qualification. The CJEU ruled that in this case the worker has to be considered to be part of the undertaking engaging him (CJEU, Case C-35/70 (Manpower), EU:C:1970:120). The court argues with the aim of the provision that is to overcome the obstacles likely to impede freedom of movement of workers. It therefore does not make sense to apply the provisions of another Member States while the workers perform work on behalf of the hiring undertaking. The problem is that the undertaking engaging the worker might misuse the provision faced with the different burden of contributions of the social security schemes. Art. 12 (1) therefore claims that the employer normally carries out its activities in the Member State from which the employer posts the employee. Employees of an undertaking that hires out exclusively or mostly crossing 12 borders cease to be covered by the legislation of the sending State when performing work on behalf of a hiring undertaking in another Member State. The CJEU pointed out that an undertaking engaged in providing temporary personnel which, from one Member State, makes workers available on a temporary basis to undertakings based in another Member State must normally carry on its activities in the first State to be covered by Art. 14 (1) (a) of Reg. No. 1408/71 (now Art. 12 (1)) (CJEU, Case C-202/97 (Fitzwilliam), EU:C:2000:75). On the other hand, the provision does not apply to workers of a company established in one Member State who are posted to carry out work in the territory of another Member State in which, apart from purely internal management activities, that undertaking performs all its activities. (CJEU, Case C-404/98 (Plum), EU:C: 2000:607). In accordance with Article 11 (3) (a), those workers are subject to the social security legislation of the Member State in whose territory they actually work. With this jurisdiction the Count obviously wanted to prevent misuse. Substantial activities have to be performed in the territory of the State of establishment. It is up to the specific circumstances of the individual case if there is such Heinz-Dietrich Steinmeyer

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an activity. Decision No. A 2 of the Administrative Commission enumerates the criteria such as the place where the undertaking has its registered office and administration, the turnover during in each Member State etc. The posting has to be limited in time. Art. 12 stipulates a maximum period but it does not require that the limitation in time is written down in the contract or follows out of the character of the employment. Art. 12 does not differ insofar. When it comes to the question how to determine the duration of the work, one must consult the contract or the character of the employment. The duration of the work must not exceed 24 months. It is necessary that the limitation in time has already been determined at the beginning of the work performance. Brief interruptions of the worker's activities with the undertaking in the State of employment, for reasons such as illness or holidays do not constitute an interruption of the posting period under Art. 12. In addition, Art. 12 (1) states that the legislation of the sending State only applies as long as the worker is not sent to replace another person whose period of posting has ended. This condition aims to prevent misuse, e.g. in a way that the undertakings with long-term construction work contracts outside the territory of the Member State in which the undertaking is established from where the workers are posted take over workers at regular intervals to prevent higher contributions in the State of work performance. It has to be realized that this is only a pragmatic decision to prevent misuse. It would have been more in accordance with the system of the conflict rules in supranational social security law to apply the legislation of the sending State to the workers that take over as the need for protection is the same. The provision has to be interpreted narrowly and cannot cover all takeovers of a worker by another worker but only those in which the reason for the turnover is the ending of the period of posting. A worker who becomes unpredictably permanently ill can therefore be replaced. An employed person can take over from another employee within the period of posting if altogether, the period of posting does not exceed 24 months. A fresh period of posting for the same worker can only start if at least two months have passed from the date of expiry of the previous posting period. In contrast to Reg. No. 1408/71, Art. 12 does not stipulate a possibility of an extension. The former Regulation stated that after a period of 12 months, it was possible to extend the period of posting for further 12 months if certain conditions were fulfilled. The short period of 12 months had been highly criticized (European Observatory on Social Security for Migrant Workers, European Report, Munich 2001, p. 12). Now, the legislator assumes that a period of 24 months is sufficiently measured and that the parties make use of an agreement according to Art. 16 in cases in which this period of time is not long enough. The period of 24 months is in accordance with numerous social security agreements (cf. for detailed information Steinmeyer, Die Einstrahlung, p. 99 et seq.). Art. 12 (1) cannot cover those cases in which a posted worker is sent from the second Member State to a third Member State. These cases have to be interpret-

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ed and organized as a new posting from the first Member State now to another Member State. It would make sense if a worker continued to be covered by the legislation of the first sending State in such a case. A posting following immediately after another posting to another Member State is covered by Art. 12 (1) and leads to a new posting in each case. According to Art. 19 (2) of Reg. No. 987/2009, proof that the legislation of 17 the sending State is applicable is delivered by an attestation provided by the competent institution of the Member State whose legislation is applicable (Attestation A 1). With regards to the scope of the attestation, the CJEU stated (CJEU, Case 18 C-202/97 (Fitzwilliam Technical Service), EU:C:2000:75), referring to the statements made by Advocate General Lenz in Case C-425/93 (Calle Grenzshop, EU:C:1995:37) that a certificate issued by the institution designated by the competent authority of a Member State is binding on the social security institutions of other Member States in so far as it certifies that workers posted by an undertaking providing temporary personnel are covered by the social security system of the Member State in which that undertaking is established. The principle of sincere cooperation that results out of the principle of Community loyalty, written down in Art. 4 (3) TEU is supposed to obligate the issuing institution to carry out a proper assessment of the facts relevant to application of the rules for determining the applicable social security legislation and, consequently, to guarantee the correctness of the information contained in the certificate. Thus, it carries the presumption of legality. Furthermore, it still has to be considered if the issue of the certificate has been delayed (CJEU, Case C-178/97 (Banks), EU:C: 2000:169). The attestation has a retroactive effect. This results from the fact that Reg. No. 987/2009 does not impose any time-limit for the issue of the certificate and that it does no more than state that the person concerned remains subject to the legislation of that Member State throughout a given period of time in the course of which he carries out a work assignment in the territory of another Member State. In addition, the Member States may by common agreement provide for exceptions to Art. 11 to 15 in favor of the person concerned if the period of time has elapsed. If this applies to the conflict rule, it must apply all the more to the issuing of the certificate as it is imposed in accordance with the implementing Regulation, therefore only to implement the basic Regulation and in its light. The issuing authority has to reconsider whether the certificate was properly issued if there are doubts as to its correctness. But the certificate is binding on the competent institution of the Member State to which the self-employed person goes in order to carry out a work assignment as long as it has not been withdrawn or declared invalid by the competent authorities (CJEU, Case C-2/05 (Herbosch Kiere), EU:C:2006:69). All of this ensures the predictability of the applicable social security system and contributes to legal certainty. If every State could declare its national legislation applicable, there would be the danger of double insurance. The functioning of the system of coordination assumes the Heinz-Dietrich Steinmeyer

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consideration of the attestation. This is now emphasized by Art. 5 of the new implementing Regulation, according to which documents issued by the institution of a Member State and showing the position of a person for the purposes of the application of the basic Regulation and of the implementing Regulation, are to be accepted by the institutions of the other Member States for as long as they have not been withdrawn or declared to be invalid by the Member State in which they were issued. However, it cannot be denied that those attestations are misused to a not insignificant extend. This is why it is alleged that national courts should be allowed to examine these certificates. But it is correct that the CJEU remains consistent in the interest of the functioning of the system of coordination and stresses that otherwise, the system based on the principle of sincere cooperation would be endangered. The issuing Member State is obliged to examine the case carefully. If there are doubts, the other Member State has to contact the issuing Member State or even apply to the Administrative Commission or the CJEU. As long as the issuing Member State has not withdrawn the certificate, it remains binding. 19 To simplify the implementation in practice, Decision No. A 1 of the Administrative Commission (OJ C 106/1, 12.06.2009) establishes a dialogue and conciliation procedure concerning the validity of documents, the determination of the applicable legislation and the provision of benefits. According to this Decision, the requesting institution contacts the requested institution to ask for necessary clarification of its decision and, where appropriate, to withdraw or declare invalid the relevant document, or to review or annul its decision. The requested institution informs the requesting institution about the outcome of its investigation as soon as possible, but at the latest within three months – in cases of high complexity within six months – after receipt of the request. It also has to notify the person concerned and, where relevant, his employer. If the institutions cannot reach an agreement during the first stage of the dialogue procedure, or if the requested institution has not been able to complete its investigation within 6 months following receipt of the request, the institutions notify their competent authorities. They can refer the matter directly to the Administrative Commission or they initiate the second stage of the dialogue procedure in which they each appoint a central contact person within two weeks after having been notified by the institutions. The contact persons shall endeavour to seek an agreement on the matter within six weeks after their appointment. If agreement cannot be reached during the dialogue procedure, the competent authorities may bring the matter before the Administrative Commission. It may decide to refer the matter to the Conciliation Board. Altogether, this procedure can be described as complicated and time-consuming. It correctly takes the legal situation into account but is of very little help in practice. 20 Falsified certificates are not legally binding.

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2. Provisions for self-employed persons (Art. 12 (2))

Instead of the place of employment, the place of activity is decisive for selfemployed persons. Activities as a self-employed person are according to Art. 1 (b) of the Regulation all activities or equivalent situations treated as such for the purposes of the social security legislation of the Member State in which such activity or equivalent situation exists (cf. CJEU, Case C-221/95 (Hervein, Hervillier), EU:C:1997:47). In respect of the principle of the application of only one legislation, this provision was necessary as it makes a decision between different possible factors of attachment (CJEU, Case C-242/99 (Vogler), EU:C:2000:582). Art. 12 (2) stipulates a special provision on posting of self-employed persons. As the criterion ‘posting’ results out of the special legal relationship between employer and employee, it is not possible to use this criterion in cases of para. 2. The only relevant factors are the continuous connection to the Member State in which the self-employed person usually pursues his activities and the temporary activity in another Member State. Para. 2 requires that the self-employed person normally pursues his activity in one Member State. This is a merely actual criterion. A formal connection to this Member State is not necessary. Art. 14 (3) of the implementing Regulation stipulates that the provision refers to a person who habitually carries out substantial activities in the territory of the Member State in which he is established. In particular, that person must have already pursued his activity for some time (at least for two months) before the date when he wishes to take advantage of the provisions of that Article and, during any period of temporary activity in another Member State, must continue to fulfil, in the Member State where he is established, the requirements for the pursuit of his activity in order to be able to pursue it on his return. This means that if there continues to be an office, the selfemployed person must, for example, continue to pay taxes in the State of origin. The provision also requires that the activity in another Member State has to be a ‘similar’ activity. The actual nature of the activity is decisive, rather than the designation of the employed or self-employed activity that may be given to this activity by the other Member State (Art. 14 (4) of Reg. No. 987/2009). The qualification made by the sending State is decisive. This is sensible to ensure that the provision is feasible. In terms of time limitation it can be referred to what has already been said under para. 1. It is necessary that the limitation in time has already been determined at the beginning of the work performance. Due to the special nature of the activity of self-employed persons, it is not necessary to stipulate cases of replacing a person whose period of posting has ended by another person. For example, it follows from Art. 12 (2) that a self-employed doctor pursuing activities in Germany remains to be covered by the German work injury insurance if he offers medical support to fellow travelers when being on a private journey to Italy (German Federal Social Court, SozR 3 – 6050 Art. 14 a No. 1). The anticipated

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duration of the activity must not exceed twenty-four months. There is no possibility of extension. 26 The competent institution of the Member State whose legislation applies provides for an attestation with regards to the legislation applicable (Art. 19 of the implementing Regulation). The attestation does not have the function to determine whether the person is an employed or a self-employed person. But the other Member State is (except in cases of obvious misuse) bound to the continued application of the legislation of the first Member State, even if the classification appears doubtful from its point of view. The functioning of the system laid down in Art. 11 to 16 depends on the Member States’ recognition of the certificates issued by the other States.

Article 13 Pursuit of activities in two or more Member States 1. A person who normally pursues an activity as an employed person in two or more Member States shall be subject: (a) to the legislation of the Member State of residence if he/she pursues a substantial part of his/her activity in that Member State; or (b) if he/she does not pursue a substantial part of his/her activity in the Member State of residence: (i) to the legislation of the Member State in which the registered office or place of business of the undertaking or employer is situated if he/she is employed by one undertaking or employer; or (ii) to the legislation of the Member State in which the registered office or place of business of the undertakings or employers is situated if he/she is employed by two or more undertakings or employers which have their registered office or place of business in only one Member State; or (iii) to the legislation of the Member State in which the registered office or place of business of the undertaking or employer is situated other than the Member State of residence if he/she is employed by two or more undertakings or employers, which have their registered office or place of business in two Member States, one of which is the Member State of residence; or (iv) to the legislation of the Member State of residence if he/she is employed by two or more undertakings or employers, at least two of which have their registered office or place of business in different Member States other than the Member State of residence. (2) A person who normally pursues an activity as a self-employed person in two or more Member States shall be subject to: (a) the legislation of the Member State of residence if he/she pursues a substantial part of his/her activity in that Member State; or (b) the legislation of the Member State in which the centre of interest of his/her activities is situated, if he/she does not reside in one of the Member States in which he/she pursues a substantial part of his/her activity. (3) A person who normally pursues an activity as an employed person and an activity as a self-employed person in different Member States shall be subject to the legislation of the Member State in which he/she pursues an activity as an employed person or, if

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Article 13 he/she pursues such an activity in two or more Member States, to the legislation determined in accordance with paragraph 1. (4) A person who is employed as a civil servant by one Member State and who pursues an activity as an employed person and/or as a self-employed person in one or more other Member States shall be subject to the legislation of the Member State to which the administration employing him/her is subject. (5) Persons referred to in paragraphs 1 to 4 shall be treated, for the purposes of the legislation determined in accordance with these provisions, as though they were pursuing all their activities as employed or self-employed persons and were receiving all their income in the Member State concerned. Article 16 Reg. No. 987/2009 Procedure for the application of Article 13 of the basic Regulation (1) A person who pursues activities in two or more Member States shall inform the institution designated by the competent authority of the Member State of residence thereof. (2) The designated institution of the place of residence shall without delay determine the legislation applicable to the person concerned, having regard to Article 13 of the basic Regulation and Article 14 of the implementing Regulation. That initial determination shall be provisional. The institution shall inform the designated institutions of each Member State in which an activity is pursued of its provisional determination. (3) The provisional determination of the applicable legislation, as provided for in paragraph 2, shall become definitive within two months of the institutions designated by the competent authorities of the Member States concerned being informed of it, in accordance with paragraph 2, unless the legislation has already been definitively determined on the basis of paragraph 4, or at least one of the institutions concerned informs the institution designated by the competent authority of the Member State of residence by the end of this twomonth period that it cannot yet accept the determination or that it takes a different view on this. (4) Where uncertainty about the determination of the applicable legislation requires contacts between the institutions or authorities of two or more Member States, at the request of one or more of the institutions designated by the competent authorities of the Member States concerned or of the competent authorities themselves, the legislation applicable to the person concerned shall be determined by common agreement, having regard to Article 13 of the basic Regulation and the relevant provisions of Article 14 of the implementing Regulation. Where there is a difference of views between the institutions or competent authorities concerned, those bodies shall seek agreement in accordance with the conditions set out above and Article 6 of the implementing Regulation shall apply. (5) The competent institution of the Member State whose legislation is determined to be applicable either provisionally or definitively shall without delay inform the person concerned. (6) If the person concerned fails to provide the information referred to in paragraph 1, this Article shall be applied at the initiative of the institution designated by the competent authority of the Member State of residence as soon as it is appraised of that person’s situation, possibly via another institution concerned.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Pursuit of activities as an employed person in two or more Member States (Art. 13 (1)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Pursuit of activities as a self-employed person in two or more Member States (Art. 13 (2)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Pursuit of activities as an employed and a self-employed-person (Art. 13 (3)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Pursuit of activities as a civil servant and an employed and/or selfemployed person (Art. 13 (4)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Allocation to a legislation (Art. 13 (5)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 4 4 15 20 22 24

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Art. 13 is designed as an exemption to Art. 11 (3) (a). On the one hand, it con- 1 stitutes, like Art. 11 (3) (b) to (e), a modification to the principle of the State of employment by determining exceptions from the attachment to the employment relationship. While the modifications made by Art. 11 (3) (b) to (e) deal with special activities that differ from the typical employment relationship, Art. 13 Heinz-Dietrich Steinmeyer

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treats the typical employment relationship and stipulates different scenarios in cross-border cases. 2 Art. 11 (3) (a) shows that in cases involving employed persons receiving wages or salaries within the territory of a Member State the place of employment is decisive. This is based on the fact that when attaching to the employment relationship to determine the applicable national legal system, one has to focus on the core of the legal relationship. Such a construction determines the applicability of national legislation by examining to which legal system the case is most closely linked. The question of attachment in cases of activities in several Member States arises for example in international transport, but not only there. As Art. 11 only determines the applicable legislation for activities in one Member State and Art. 12 only regulates those cases in which the core of the employment relationship lies in one Member State, only the activity is temporarily pursued in another Member State, it was necessary to create a provision for cases in which the employment is usually carried out in two or more Member States. 3 Para. 1 deals with the activity as an employed person in two or more Member States, para. 2 contains the corresponding provision for self-employed persons. Para. 3 is about the constellation in which a person pursues activities in different Member States both as an employed and a self-employed person. Para. 4 deals with the case of civil servants and para. 5 deals with the consequences of the allocations made by Art. 13 (1) to (4). II. Commentary 1. Pursuit of activities as an employed person in two or more Member States (Art. 13 (1)) 4

In these situations, the attachment to the place of employment or place of work performance obviously does not work. Therefore, the Regulation works with the principle of the State of residence (cf. CJEU, Case C-13/73 (Hakenberg), EU:C:1973:92) and the principle of the State of establishment. It becomes clear that the principle of the State of residence prevails the principle of the State of establishment. If a person receiving wages or salaries pursues activities in two or more Member States, it is not possible to attach to the place of employment. The attachment to the place of the registered office or residence of the employer or the undertaking does not make sense either, as it does not offer a reliable and appropriate allocation if a person pursues activities in several Member States. Therefore, the Regulation attaches to the place of residence which is normally subsidiary. It is necessary that the person concerned normally pursues his activities within the territory of several Member States. This was assumed by the CJEU in the case of a Danish worker residing in Denmark and employed exclusively by an undertaking with its seat in Germany, who in the course of that employment relationship, regularly, for several hours each week and for a period 176

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not limited to twelve months pursues his activity partly in Denmark (CJEU, Case C-425/93 (Calle Grenzshop), EU:C:1995:37). The same attachment shall apply in those cases in which the person concerned is employed by several undertakings or employers with a registered office or place of residence within the territory of different Member States. It is necessary in both cases that the person concerned is subject to the social security scheme of his State of residence, otherwise, the legislation of the other State where he occasionally pursues activities apply (CJEU, Case C-8/75 (Association du football club d’Andlau), EU:C: 1975:87). On the other hand, a mere affiliation to the social security scheme is not sufficient. According to the wording of the provision, there actually have to be two employment relationships. It is noticeable that if there are several employment relationships, there is no separate attachment but the attachment takes into account the whole working life of the person concerned (cf. para. 5). Thus the simultaneous application of several legal systems is prevented that would lead to insoluble difficulties, especially in benefits law, in the case of risks which, by their nature, are not capable of being thus localized (CJEU, Case C-73/72 (Benzinger), EU:C:1973:26). A national provision is incompatible with para. 1 (a) if “its effect is such that a worker residing in that Member State is not insured for the purposes of an oldage pension because he is insured for such purposes under the legislation of another Member State, even if he resided in the territory of the first-mentioned Member State and is there engaged in gainful employment concurrently with his activities in the territory of the other Member State. That answer is not affected by the fact that the employment in the State of residence is secondary to the main activity of the person concerned which is pursued in the other Member State” (CJEU, Case C-276/81 (Kuijpers), EU:C:1982:317). Otherwise the Member State could determine itself the extent to which its own legislation or that of another Member State is applicable. The place of the registered office of the undertaking or the place of residence of the employer can be decisive in a subsidiary way (Art. 13 (1) (b)). This is the case if the State of residence and the State of employment are not partially the same with regards to activities performed in several Member States, i.e. if a person does not live in any of those Member States. Here, the basic idea of a general attachment to the employment relationship has to be applied again by declaring the place of establishment as decisive. In those cases, there is no relation between employment relationship and place of residence as it is in the case of a frontier worker. The ‘normal pursuit of an activity’ in two or more Member States in terms of para. 1 is given if the person concerned maintains his activity in one Member State but simultaneously pursues a separate activity in one or more other Member States, irrespective of the duration or the nature of the separate activity. The normal pursuit of an activity can also be assumed if the person continuously pursues alternating activities, with the exception of marginal activities, in two or Heinz-Dietrich Steinmeyer

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more Member States, irrespective of the frequency or regularity of the alternation (Art. 14 (5) of Reg. No. 987/2009). Thus, cases are covered in which a person pursues for example an activity as an employed lawyer in one Member State but also pursues activities in another Member State due to his international orientation but also cases involving persons pursuing activities in international transport who have to change their place of work performance frequently and regularly due to the nature of their work. It was therefore not necessary to create a special provision for international transport as it was the case in Reg. No. 1408/71 (namely Art. 14 (2) (a)). One has to bear in mind that in international transport for seamen, there is a special provision in Art. 11 (4) as well as there is a special provision for flight crew members (Art. 11 (5)). Finally, seasonal employment within the territory of a State during the period of paid holidays can fall under Art. 13 (1) if there is an employment relationship to an employer in another State. 9 It should be noted that the distinction between cases of Art. 13 and posting cases of Art. 12 can be difficult in the individual case. This is especially the case if the activity is pursued in different Member States but on behalf of the same undertaking. Art. 14 (7) of the implementing Regulation stipulates that the duration of the activity in one or more other Member States (whether it is permanent or of an ad hoc or temporary nature) shall be decisive. For these purposes, an overall assessment has to be made of all the relevant facts including, in particular, in the case of an employed person, the place of work as defined in the employment contract. This leads to the conclusion that a temporary activity falls under the scope of Art. 12. If the employment contract already states that there are two places of work performance in different Member States, this suggests that one has to apply Art. 13 and that there is a lasting activity in two or more Member States. 10 Both Art. 13 (1) (a) and (b) work with the term ‘substantial part of the activity. Art. 14 (8) of the implementing Regulation stipulates that a substantial part of employed or self-employed activity pursued in a Member State means that a quantitatively substantial part of all the activities of the employed or self-employed person must be pursued there, without this necessarily being the major part of those activities. To determine whether a substantial part of the activities is pursued in a Member State, the implementing Regulation states that as indicative criteria one shall take into account the working time and/or the remuneration. In the framework of an overall assessment, a share of less than 25 % in respect of the criteria mentioned above shall be an indicator that a substantial part of the activities is not being pursued in the relevant Member State. To conclude, the different criteria have to be weighed up in every individual case which is problematic for the practical application. It does not become sufficiently clear which criteria are more important in the individual case. This can be relevant if the case is about an activity that in contrast to others is highly paid and does not consume much time. Therefore, one has to take into account the general appear-

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ance of the activity. The institutions named in Art. 16 of the implementing Regulation have to determine the legislation applicable. If there is a judicial review, it has to be considered that the decision of the institutions is a predictive decision involving a weigh up of criteria which determines the scale of review (cf. with a stricter point of view Schreiber, in: Schreiber/Wunder/Dern, VO (EG) Nr. 883/2004, Art. 13 para 12). The legislation of the State of residence applies if the person concerned pur- 11 sues a substantial part of his activity there or if he is employed by various undertakings or employers whose registered office or place of business is in different Member States (cf. (1) (a)). In these cases it is not possible to attach to the place of employment because there are two or more places of employment. It is therefore sensible to attach to the place of residence. The State of residence can only be considered if the attachment to the registered office or place of business of the undertaking or the employer that also applies subsidiary instead of attaching to the employment does not seem to be appropriate. It does seem to be appropriate to consider the State of residence as decisive if the substantial part of the activity is pursued in the State of residence. The attachment to the place of residence of the employed person, which in general is subsidiary, also appears to be appropriate if a substantial part of the activity is not pursued in the State of residence, but the activity is pursued on behalf of various undertakings in different Member States of which at least two have their registered office outside the territory of the Member State of residence. In those cases it does not make sense to attach to the registered office or place of business. An attachment to the Member State of residence is not possible if there is no 12 (sufficient) connection to the employment that is created by the place of employment or the place of the registered office of the employer or undertaking. Subsidiary, the person is therefore subject to the legislation of the Member State in which the registered office or place of business of the undertaking or employer employing him is situated (Art. 13 (1) (b) (i)). This provision has been modified further by the latest change made by the Reg. No. 465/2012 in such way that a person is subject to the legislation of the Member State in which the registered office or place of business of the undertakings or employers is situated if he is employed by two or more undertakings or employers which have their registered office or place of business in only one Member State (Art. 13 (1) (b) (ii)). This emphasizes the priority of the place of the registered office as an attachment factor and leads to a clear application of only one legislation. But even if the employers or undertakings have their registered office or place of business in two Member States, the person concerned is subject to the legislation of the Member State in which the registered office or place of business of the undertakings or employers is situated. Art. 13 (1) (b) (iii) states in terms that are difficult to understand that the Member State of residence shall not be decisive. This becomes clear when considering the background information that an attachment to the Member State of residence shall only apply if a substantial part of activity is Heinz-Dietrich Steinmeyer

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pursued there. This also clarifies the final subsidiary attachment to the Member State of residence stipulated in Art. 13 (1) (b) (iii). The adoption of the new amendment clarifies that the condition of the pursuit of a ‘substantial part’ of the activity also applies to an attachment to the place of residence of the person concerned if he is employed by two or more undertakings or employers. 13 If the undertaking’s or employer’s registered office or place of business is located outside the territory of the EU, it does not make sense to attach to this registered office or place of business as the employment relationship is nevertheless executed within the territory of the EU. Therefore, one can only attach to the place of residence in this case (Art. 14 (11) of the implementing Regulation). Despite the unclear wording of the implementing Regulation, the territory within the EU also includes the EEA States and Switzerland as Reg. No. 883/2004 is also applicable to those States. 14 A person who pursues activities in two or more Member States shall inform the institution designated by the competent authority of the Member State of residence thereof (Art. 16 of Reg. No. 987/2009). This institution determines the legislation applicable. That initial determination is provisional and it becomes definitive within two months of the institutions designated by the competent authorities of the Member States concerned being informed of it. The latter institution can state that it cannot yet accept the determination or that it takes a different view on this. In case of uncertainty, the competent institutions shall determine the applicable legislation by common agreement. 2. Pursuit of activities as a self-employed person in two or more Member States (Art. 13 (2))

Para. 2 transfers the basic decision of para. 1 to self-employed activities. The place of work performance replaces the place of employment that is decisive for employed persons. Self-employed activities are those activities which are regarded as such for the purposes of the social security legislation of the Member State in whose territory those activities are pursued. (CJEU, Case C-221/95 (Hervein and Hervillier), EU:C:1997:47). This provision making a decision between different possible attachment factors was necessary due to the principle of application of the legislation of a single Member State (CJEU, Case C-242/99 (Vogler), EU:C:2000:582). If the person concerned normally pursues his activities in two or more Member States, the place of residence of the self-employed person is the relevant attachment factor. If the State of residence and the State of work performance of the self-employed person differ, the State of work performance is – generally speaking – decisive. 16 According to Art. 14 (6) of Reg. No. 987/2009, a person who normally pursues an activity as a self-employed person in two or more Member States shall refer, in particular, to a person who simultaneously or in alternation pursues one or more separate self-employed activities, irrespective of the nature of those activities, in two or more Member States. This means that there does not have to 15

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be a connection in terms of content between the activity in the one and the activity in the other Member State, even if in practice this might be the case in a lot of cases. Due to the fact that the attachment to the place of work performance is not 17 helpful as it is also the case with para. 1, at first, the place of residence is decisive (cf. Art. 13 (1) (a)). This is the case if the person concerned pursues the majority of his activity in the State of residence. To determine whether a substantial part of the activities is pursued in a Member State, the indicative criteria that have to be taken into account are the turnover, the working time and the number of services rendered (Art. 14 (8) (b) of the implementing Regulation). Parallel to Art. 13 (1), a share of less than 25 % in respect of the criteria mentioned above indicates that a substantial part of the activities is not being pursued in the relevant Member State. There has to be an overall assessment of the case examining all the criteria mentioned in the implementing Regulation. These criteria are of little help, e.g. the number of services rendered is hardly a suitable criterion. If a self-employed person does not reside in one of the Member States in 18 which he pursues a substantial part of his activities, the center of interest of his activities is decisive, Art. 13 (2) (b). Therefore, Art. 14 (9) of Reg. No. 987/2009 stipulates that the center of interest has to be determined by taking account of all the aspects of that person’s occupational activities, notably the place where the person’s fixed and permanent place of business is located, the habitual nature or the duration of the activities pursued, the number of services rendered, and the intention of the person concerned as revealed by all the circumstances. The dominant aspect in practice is probably the place of the fixed and permanent place of business because it can be determined predictably. However, this might be modified by the duration of the activity if the self-employed person has a fixed place of business in one Member State but pursues most of his activities in another Member State. In this situation, it is necessary to carry out an overall assessment. The described system of attachment is quite complicated and demands de- 19 tailed provisions to enable its administrative implementation. In this context one should take Art. 16 of the implementation Regulation into account (supra para. 14). The latest amending Regulation even increased the complexity. 3. Pursuit of activities as an employed and a self-employed-person (Art. 13 (3))

Art. 13 (3) resolves the conflict of the principles of Art. 13 (1) and (2) that oc- 20 curs if employed and self-employed activities that are pursued in several Member States coincide. Following the logic of the Regulation, it has to be determined how the attachment to the employment, the self-employed activity and the place of residence rank. The conflict between the activity as an employed or self-employed person is decided in favour of the employment by stating that a Heinz-Dietrich Steinmeyer

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person who pursues an activity as an employed person and an activity as a selfemployed person in different Member States shall be subject to the legislation of the Member State in which he pursues an activity as an employed person. This is adequate because the different national social security schemes usually also attach to the employment relationship and because the Regulation also shows a certain ranking. In general, the legislation of the State of employment is therefore decisive, namely in total and not only with regards to certain branches of social security (CJEU, Case C-71/93 (Poucke), EU:C:1994:120). In case of a person pursuing an employed activity in two or more Member States, where the place of employment does not help, the legislation has to be determined according to para. 1, i.e. subsidiary, it has to be attached to the place of residence and then to the place of the registered office or place of business of the undertaking or employer. 21 In contrast to Art. 14 c of Reg. No. 1408/71, Art. 13 (3) does not allow an exceptional double insurance. This possibility was problematic as the double insurance can restrict the freedom of movement of workers or respectively the freedom of establishment of self-employed persons. (cf. with a critical opinion Devetzi, Die Kollisionsnormen, p. 62 et seq. with further references; Horn, ZIAS 2002, 120, 136 et seq.). The Advocate-General therefore considered this provision correctly as being invalid (Advocate General Colomer, CJEU Case C-221/95 (Hervein I), EU:C:1997:47; Advocate General Jacobs, CJEU joined Cases C-393/99 and C-394/99 (Hervein II and Lorthiois), EU:C:2002:182). Critics also considered the provision to be an inadmissible dismissal of the principle of application of one national legislation only. Furthermore, it was argued that the provision was arbitrary as it lead to a different treatment of per se identical groups of persons depending on in which Member State they wanted to pursue activities (cf. Devetzi, Die Kollisionsnormen, p. 62 with further references; in detail cf. Edler, ZESAR 2003, 156, 159 and Voigt, Die Reform des Koordinierenden Europäischen Sozialrechts, ZESAR 2004, 121 et seq.). It was therefore consistent that such a provision was not included in the new Regulation even if the CJEU maintained in “Hervein II and Lorthiois” (EU:C:2002:182) its case law and stated that the named provision was in accordance with Community law, arguing that the EC offered no guarantee to a worker extending his activities into more than one Member State or transferring them to another Member State will be neutral as regards social security. Any disadvantage, by comparison with the situation of a worker who pursues all his activities in one Member State, resulting from the extension or transfer of his activities into or to one or more other Member States and from his being subject to additional social security legislation was not considered contrary to the freedom of movement of workers (Art. 45 TFEU = Art. 39 EC), the freedom of establishment (Art. 49 TFEU = Art. 43 EC) or the requirements of Art. 48 TFEU (= Art. 42 EC) if that legislation does not place that worker at a disadvantage as compared with those who pursue all their activities in the Member State where it applies or as compared

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with those who were already subject to it and if it does not simply result in the payment of social security contributions on which there is no return. This case law has been confirmed in the meantime by the CJEU in a case of Dutch legislation which included, in the basis for calculating social security contributions, interest such as that paid, in the case in the main proceedings, by a company established in the Netherlands to a Dutch national resident in Belgium (CJEU, Case C-493/04 (Piatkowski), EU:C:2006:167). The inclusion of the interests does not confer on him a right to social benefits additional to those he already enjoys. But the scope of the social protection and the precise method of calculating social security contributions are not relevant, since the obligation to pay those contributions is offset by the overall social protection provided. That situation is inherent in a system of social security based on principles of solidarity. 4. Pursuit of activities as a civil servant and an employed and/or selfemployed person (Art. 13 (4))

The provision is a follow-up provision that results from the inclusion of civil 22 servants and their special schemes into the personal and material scope of Reg. No. 883/2004. As the European legislator did not decide – as it was also before under Reg. No. 1408/71 – to simply include this group of persons in the general system of the Regulation, e.g. by transferring the provisions on aggregation applicable to the schemes for employed persons to the special schemes for civil servants (Steinmeyer, in: Hanau/Steinmeyer/Wank (ed.), Handbuch des europäischen Arbeits- und Sozialrechts, 2002, § 25), it was consequent to let the allocation to this special system prevail in terms of conflict rules. If a person pursues activities both as a civil servant and an employer or self- 23 employed person, the provision gives priority to the status as civil servant to avoid double insurance. It attaches to para. 3 which stipulates that if a person pursues an activity as an employed person and an activity as a self-employed person, he is subject to the legislation of the Member State in which he pursues an activity as an employed person. Thus, the attachment to the employment prevails. Exceeding para. 3, this is also applicable in case that the person concerned pursues activities as an employed and a self-employed person in other Member States. 5. Allocation to a legislation (Art. 13 (5))

Para. 5 draws the conclusions from the principle of the application of one leg- 24 islation only in cases of a connection to several Member States. If this is supposed to prevent double insurance, it is necessary to prevent simultaneously that the employed person suffers any disadvantages caused by the basic decision of the Regulation. If in certain cases of employment of a worker or activity as a self-employed 25 person in several Member States the provisions of only one Member State are declared applicable, this does not change the location of some of the employHeinz-Dietrich Steinmeyer

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ments or activities in other Member States. To prevent that the Member State declared competent by para. 1 to 4 only takes the employment pursued within its territory into account, Art. 13 (5) stipulates that the person concerned shall be treated as though he was pursuing all his activities as employed or self-employed person and was receiving all his income in the Member State concerned. The provision does not only cover according to its wording cases of several employments in several Member States but also cases of one employment with connection to several Member States. The Member State declared competent by the mentioned provisions cannot claim that the employment was not fully pursued within its territory. However, it follows from this allocation that a Member State can set out a contribution such as a moderation contribution (which is a type of solidarity contribution) to be calculated in such a way as to include under the heading of occupational income the income obtained in the territory of a Member State other than the Member State whose social legislation is applicable even if, after paying that contribution, the self-employed person cannot claim any social security or other benefit at the expense of that State (CJEU, Case C-249/04 (Allard), EU:C:2005:329).

Article 14 Voluntary insurance or optional continued insurance (1) Articles 11 to 13 shall not apply to voluntary insurance or to optional continued insurance unless, in respect of one of the branches referred to in Article 3(1), only a voluntary scheme of insurance exists in a Member State. (2) Where, by virtue of the legislation of a Member State, the person concerned is subject to compulsory insurance in that Member State, he/she may not be subject to a voluntary insurance scheme or an optional continued insurance scheme in another Member State. In all other cases in which, for a given branch, there is a choice between several voluntary insurance schemes or optional continued insurance schemes, the person concerned shall join only the scheme of his/her choice. (3) However, in respect of invalidity, old age and survivors’ benefits, the person concerned may join the voluntary or optional continued insurance scheme of a Member State, even if he/she is compulsorily subject to the legislation of another Member State, provided that he/she has been subject, at some stage in his/her career, to the legislation of the first Member State because or as a consequence of an activity as an employed or self-employed person and if such overlapping is explicitly or implicitly allowed under the legislation of the first Member State. (4) Where the legislation of a Member State makes admission to voluntary insurance or optional continued insurance conditional upon residence in that Member State or upon previous activity as an employed or self-employed person, Article 5(b) shall apply only to persons who have been subject, at some earlier stage, to the legislation of that Member State on the basis of an activity as an employed or self-employed person. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Exceptions to the general conflict rules, Art. 11, for voluntary and optional continued insurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Collision of voluntary insurances and mandatory insurances . . . . . . .

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1 3 3 4

Article 14

I. Spirit and Purpose

Characteristic feature of the social security schemes of the Member States is 1 that, except long-term care insurance, they mostly allow voluntary insurance. It might happen that in some Member States there is only a system of voluntary insurance for certain branches of social security. Due to this situation, there can be a coincidence of voluntary insurance and mandatory insurance as well as the problem that the conflict rules of the Regulation refer to a legal system that does not provide for a mandatory insurance but only a voluntary insurance or optional continued insurance. Para. 1 regulates this in a certain sense negative conflict while para. 2 and 3 are dedicated to the coincidence of voluntary and mandatory insurance. Para. 4 draws a conclusion from the newly introduced Art. 5 that treats the equal treatment of benefits, income, facts or events. Voluntary insurance means any insurance that requires a declaration of inten- 2 tion of the insured person for the conclusion of the contract. The possibility to pay contributions retrospectively also falls within this definition. II. Commentary 1. Exceptions to the general conflict rules, Art. 11, for voluntary and optional continued insurances

Art. 11 determines the applicable legislation for the relevant cross-border cas- 3 es and follows the principle of application of only one legislation. Art. 14 (1) makes an exception from this principle in case of a voluntary insurance or optional continued insurance. In those cases there is only a reference to the national legislation with regards to the application of a certain legal system. Art. 11 to 13 are insofar inapplicable (cf. Devetzi, Die Kollisionsnormen, p. 89). In this situation, the Regulation allows that besides the mandatory insurance, there is a voluntary insurance. The principle of the exclusive application of only one Member State’s legislation does not apply. The priority of the mandatory insurance is maintained. The provision must be understood as meaning that in those cases, the legislation that is according to the conflict rules subsidiary applies. This situation has to be distinguished from the other case that is mentioned in Art. 14 (1) in which there exists only a voluntary scheme of insurance in respect of one of the branches referred to in Art. 3 (1). In this situation, Art. 11 to 13 do apply to allow at least a protection on a voluntary basis. This stipulation shows clearly that the conflict rules of the Regulation generally only apply to mandatory insurances. This has to be distinguished from the consideration of periods of voluntary insurance – e.g. for the calculation of benefits or the determination of the benefits requirements according to the Regulation (too general explanations Schreiber, in: Schreiber/Wunder/Dern, VO (EG) Nr. 883/04, Art. 14 para. 3).

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2. Collision of voluntary insurances and mandatory insurances

A coincidence of voluntary and mandatory insurance can occur in cases in which the Regulation permits the application of the legislation of several Member States. The scope of Art. 14 (2) goes beyond this situation. The provision seeks to generally cover those cases in which it is necessary to make a decision between two or more legal systems. In these cases the priority of the mandatory insurance over the voluntary insurance or the optional continued insurance replaces the ranking of the different criteria of attachment. The principle of the application of one legislation only is preserved. Differing from Reg. No. 1408/71 it is explicitly stated that the person concerned must not be subject to a voluntary or optional continued insurance. 5 This constellation does not only appear with regards to the relation between mandatory and voluntary insurance. There might also be voluntary or optional continued insurances under different schemes that coincide. To apply only one legal system in such a situation, the law stipulates that the insured person has do decide in favour of one system. According to the basic idea of voluntary and optional continued insurance, he is given the opportunity to decide freely on his insurance coverage with regards to the allocation to a Member State. 6 An exception from the hierarchy between voluntary and optional continued insurance and mandatory insurance that follows from the characteristics of the national legislation is stipulated in para. 3. In respect of invalidity, old age and survivor’s benefits, Art. 14 (3) permits the voluntary insurance in a Member State in cases in which a person is compulsory subject to the legislation of another Member State, provided that he has been subject, at some stage in his career, to the legislation of the first Member State because or as a consequence of an activity as an employed or self-employed person and if such overlapping is explicitly or implicitly allowed under the legislation of the first Member State. In derogation from Reg. No. 1408/71, para. 3 sets out the additional condition that the person concerned must have at some stage in his career been subject to the legislation of the first Member State. This is to ensure that there is or was a connection to the Member State whose possibility of voluntary or optional continued insurance is used. 7 Para. 4 draws conclusions from the new provision regulating the conflict-oflaw principle of equivalence (Art. 5). This provision states that benefits, income, facts or events that have certain legal effects are to be treated as if they had occurred within the territory of the Member State whose legislation is to be applied. Art. 4 (b) stipulates that where, under the legislation of the competent Member State, legal effects are attributed to the occurrence of certain facts or events, that Member State shall take account of like facts or events occurring in any Member State as though they had taken place in its own territory. This limits the scope of para. 4 to those persons that at some stage in the past have been subject to the legislation of the Member State in which they want to make use of the possibility of voluntary or optional continued insurance. The national re4

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quirement of the place of residence is suspended and a place of residence in another Member State is sufficient as long as there used to be such a connection in the past. Thus, it is clarified that a place of residence in another Member State does not preclude under these conditions the possibility of a voluntary or optional continued insurance.

Article 15 Contract staff of the European Communities Contract staff of the European Communities may opt to be subject to the legislation of the Member State in which they are employed, to the legislation of the Member State to which they were last subject or to the legislation of the Member State whose nationals they are, in respect of provisions other than those relating to family allowances, provided under the scheme applicable to such staff. This right of option, which may be exercised once only, shall take effect from the date of entry into employment. Article 17 Reg. No. 987/2009 Procedure for the application of Article 15 of the basic Regulation Contract staff of the European Communities shall exercise the right of option provided for in Article 15 of the basic Regulation when the employment contract is concluded. The authority empowered to conclude the contract shall inform the designated institution of the Member State for whose legislation the contract staff member of the European Communities has opted.

I. Spirit and Purpose

The European Union is a community of independent and sovereign States that 1 maintain diplomatic relations amongst themselves. Art. 16 of Reg. No. 1408/71 contained special conflict rules regarding persons employed by diplomatic missions and consular posts of the Member States. Now, these cases can be solved applying the general conflict rules, also due to the inclusion of civil servants. This is why Art. 15 of Reg. No. 883/2004 is limited to the contract staff of the European Union. II. Commentary

Contract staff of the European Communities means a special group of staff of 2 the Communities. It has to be distinguished between officials of the European Community (cf. Staff Regulations of the European Communities – Reg. No. 259/68, OJ L 56/1, 05.03.1968) and other servants. Under the latter group falls among others temporary staff and contract staff, until 2007 also assisting staff. The group of persons that is supposed to be covered by Art. 15 is the group of contract staff. There has to be distinguished between two subgroups. One group covers persons who work in an institution to carry out manual or administrative support service tasks, in the agencies referred to in Article 1a(2) of the Staff Regulations, in other entities inside the European Union created, after consultation of the Staff Regulations Committee, by specific legal act issued by one or more institutions allowing for the use of such staff, in Representations and DeleHeinz-Dietrich Steinmeyer

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gations of Community institutions and in other entities situated outside the European Union. With this staff covered by Art. 3 (a) of Reg. No. 259/68 the EU first concludes temporary employment relationships for a fixed period of only five years that can be renewed for a period of a further five years and after that can be renewed for an indefinite period of time. Staff of the second group of persons covered by Art. 3 (b) of Reg. No. 259/68 are employed to replace certain persons who are unable for the time being to perform their duties due to illness, maternity leave etc., namely officials or temporary staff for a certain period of time or to compensate the lack of officials in times of excessive workload or to provide additional staff to perform work on a temporary basis if there are no officials with the required skills concerning specific matters. In those cases there is only a short-term employment of at least three months and a maximum of three years (http://ec.europa.eu/civil_service/job/contract/index_en.htm). 3 The application of the legislation of the Member State in whose territory this group of persons is employed could be considered. In cases of staff of the head department this would lead to the application of Belgian or Luxembourgian legislation. Such an attachment does not always make sense, especially if the staff can be moved to other departments and if the work for the European Communities is limited in time. Art. 15 therefore offers this group of persons a right to opt between three possible attachment factors. According to the basic decision of the Regulation, they can first choose the legislation of the State of employment. Besides this attachment, they can also choose the legislation of those Member States whose nationals they are or to which they were last subject to allow continuity in the insurance history. Provisions relating to family allowances whose granting is regulated in the Conditions of Employment of other servants of the European Communities are excluded from the right of option. This exception is based on the very generous Belgian family benefits. 4 Unlike in the case of para. 2, this right of option can be exercised only once due to reasons of practicability. According to Art. 17 of Reg. No. 987/2009, contract staff has to opt when the employment contract is concluded.

Article 16 Exceptions to Articles 11 to 15 (1) Two or more Member States, the competent authorities of these Member States or the bodies designated by these authorities may by common agreement provide for exceptions to Articles 11 to 15 in the interest of certain persons or categories of persons. (2) A person who receives a pension or pensions under the legislation of one or more Member States and who resides in another Member State may at his/her request be exempted from application of the legislation of the latter State provided that he/she is not subject to that legislation on account of pursuing an activity as an employed or self-employed person.

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Article 16 Article 18 Reg. No. 987/2009 Procedure for the application of Article 16 of the basic Regulation A request by the employer or the person concerned for exceptions to Articles 11 to 15 of the basic Regulation shall be submitted, whenever possible in advance, to the competent authority or the body designated by the authority of the Member State, whose legislation the employee or person concerned requests be applied.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Parties of the agreement (Art. 16 (1)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Legal nature of the agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Content of the agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Exceptions for pensioners (Art. 16 (2)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 5 5 6 7 11

I. Spirit and Purpose

Art. 11 to 15 create a quite rigid system of conflict rules that does not always 1 and not in all cases take into account sufficiently the needs of cross-border activities in a common market. As a compensation for the relative rigidity that continues to exist after the Reg. No. 883/2004 came into force and that for example finds expression in the short maximum duration of posting of 24 months without the possibility of extension, one might consult Art. 16. This provision allows the agreement on exceptions. This possibility will become increasingly important with the continuing development of the EU internal market. However, the question remains if it would be sensible to further increase the flexibility of the system of conflict rules in the future. The procedure laid down in Art. 16, based on the experiences made with Art. 17 of Reg. No. 1408/71, has proved in practice to be time-consuming. An agreement based on Art. 16 is required if it is foreseeable from the begin- 2 ning that the activity in another Member State will exceed 24 months. Such an agreement is also necessary if at first, only a short-term posting was planned that later proved to be exceeding the period of 24 months that is permitted by Art. 12. Art. 16 is not supposed to de facto open the possibility of a choice of law but it is supposed to enable an appropriate allocation in cases in which despite a longer stay in another Member State, the focus of the employment relationship remains in the sending State. However, an agreement can also be taken into consideration if the insurance was executed by a State incompetent according to Art. 11 to 15, due to an incorrect assessment. In those cases the agreement serves the avoidance of a possibly necessary extensive unravelling. The possibility of an agreement according to Art. 16 (Art. 17 of Reg. No. 3 1408/71) is used quite generously in practice. Here it plays a role that the posting duration of the former Art. 14 of Reg. No. 1408/71 was considered to be very restrictive, on the other hand, short periods of time are recommended due to competition aspects. Art. 12 has resolved this matter only to a limited extend. If longer periods of time lead to distortion of competition due to different contribution rates in the Member States, Art. 16 has proved to be helpful on the one hand to take into account cases of activities over a longer period of time in another Member State and on the other hand to prevent misuse of the different

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contribution rates. The practice varies in details. Most of the Member States are willing to provide flexibility e.g. in terms of the maximum period of posting, while Belgium and the Netherlands are not ready to agree to an exemption from the respective legal social security provisions if the period of time exceeds five years. Such a period of five years is also used by Denmark, Greece, Great Britain, Italy and Ireland. France and Germany generally accept periods of time of up to eight years but are also ready to handle this matter – as Portugal does in general – more flexible (cf. with further details Devetzi, Die Kollisionsnormen, p. 80 with further references). A certain practical guideline can be noted insofar as normally, a period of up to five years is possible and under special circumstances, a further extension of three years can be taken into consideration. It should be noted that especially in Germany, Art. 16 is applied frequently due to the lack of a time limit in the German provisions on posting from Germany to other Member States and vice-versa (§§ 4, 5 of the German Social Security Code IV). 4 Para. 2 contains, differing from the former Reg. No. 1408/71, a provision that stipulates an exception from the attachment according to Art. 11 (3) (e). It states that a person who receives a pension under the legislation of a Member State and who resides in another Member State may at his request be exempted from the application of the legislation of the latter State provided that he is not subject to that legislation on account of pursuing an activity as an employed or self-employed person. II. Commentary 1. Parties of the agreement (Art. 16 (1)) 5

Art. 16 lists as partners of such an agreement the Member States, the competent authorities of these Member States and the bodies designated by these authorities. The competent authorities are according to Art. 1 (m), in respect of each Member State, the Minister, Ministers or other equivalent authority responsible for social security schemes throughout or in any part of the Member State in question. 2. Legal nature of the agreement

6

The legal nature of the agreement depends on the respective partners of the agreement. Agreements between Member States are of an international-law nature. As a legislative act is usually not necessary for the fulfillment of an agreement according to Art. 16, the agreement constitutes an administrative agreement that does not need the assent of parliament. However, the German Federal Social Court (SozR 6180 Art. 13 No. 3) takes the view that special agreements according to Art. 16 (former Art. 17 of Reg. No. 1408/71) that regulate the affiliation to an insurance of a group of employed persons that is determined by general and abstract characteristic features differing from Art. 11 et seq. need a 190

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command by national law to apply to become nationally effective (proclamation of the content of the agreement with the force of law or force of regulation). In this special situation, this decision is correct even if the difficulties resulting from it must not be underestimated. General and abstract provisions are of a legal-provision nature in German public law. In other cases such agreements are to be considered as public law contracts. 3. Content of the agreement

Art. 16 provides such agreements in the interest of certain groups of persons or certain persons that fall within the personal scope of the Regulation. From the wording of the provision, it could be assumed that such agreements can only be concluded if the institutions listed in Art. 16 take the initiative. With regards to individual persons, e.g. the prolongation of the period of posting for workers of a certain undertaking, the agreements are concluded on request of the employer of the employee. In those cases, they exercise sole control over the legal proceedings. In case of the transfer of a worker, the agreement according to this provision allows an agreement that the employed person remains subject to the social security legislation of the former State even if place of residence and place of employment are now situated in another Member State (CJEU, Case C-454/93 (Van Gestel), EU:C:1995:205). The Member State that used to be competent thus remains competent. According to the case law of the CJEU, the Member States can decide to apply the legislation of a Member State with retroactive effect (CJEU, Case C-101/83 (Brusse), EU:C:1984:187). Art. 16 guarantees from its wording an extensive power to conclude agreements by stating that the Member States can provide for exceptions to Art. 11 to 15. There is nothing in the wording to indicate that recourse to the derogation made available to the Member States by that provision is possible only as regards to the future. Art. 16 does not prevent that the legislation of a Member State is declared applicable for a longer period of time. This might even happen in cases in which a worker failed to join the social security scheme determined by Art. 11 (3) (a). An agreement based on Art. 16 can only declare the social security legislation of a Member State applicable in total. An agreement stipulating the application of certain branches of the respective system of the Member State e.g. only of the health care or pension insurance is not possible.

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4. Exceptions for pensioners (Art. 16 (2))

A person who receives a pension under the legislation of a Member State 11 might not want to receive his pension in this Member State but given the freedom of movement make use of the possibility to receive the benefits from this state in another Member State. This can also or especially happen if a person is concerned who already receives pensions under the legislation of several MemHeinz-Dietrich Steinmeyer

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ber States. The Regulation makes the correct basic decision in favour of the place of residence. However, it may, upon request, be appropriate to attach differently as relationships and links to the Member State(s) from which the person receives benefits might exist. This can be relevant in the area of health care insurance. Thus, Member States such as e.g. Germany include the pensioners in their health care insurance scheme which might lead to double insurance if these persons stay in another Member State. Therefore, para. 2 stipulates the possibility to be exempted from the application of this legislation that can however only apply if the pensioner is not subject to that legislation on account of pursuing an activity as an employed or self-employed person. The insurance according to employment or self-employment is given priority.

Title III Special Provisions concerning the various categories of benefits Chapter 1 Sickness, maternity and equivalent paternity benefits Bibliography: Bieback, Öffnung des Krankenhausmarkts in Europa für Qualitätswettbewerb?, ZESAR 2015, p. 51; Bokeloh, Die soziale Sicherung der Grenzgänger, ZESAR 2014, S. 168; Cabral, The internal market and the right to cross-border medical care, E.L.Rev. 2004, p. 673; Haverkate/Huster, Europäisches Sozialrecht, 1999; Jorens/Spiegel u.a., Coordination of Long-term Care Benefits – current situation and future prospects, trESS Think Tank Report 2011; Klar, Gesundheitstourismus in Europa. Eine empirische Transaktionskosten-Analyse. 2013; Klein/Schuler (eds.), Krankenversicherung und grenzüberschreitende Inanspruchnahme von Gesundheitsleistungen in Europa, 2010; Rosenmöller/McKee/Baeten (eds), Patient mobility in the European Union: learning from experience. Copenhagen, WHO Regional Office for Europe, 2006; Spiegel, trESS-Arbeiten betreffend die Koordination von Pflegeleistungen, ZESAR 2013, 209; Windisch-Graetz, Europäisches Krankenversicherungsrecht, 2003; WindischGraetz, Anmerkung zum Urteil des EuGH vom 21.02.2006, Az.: C-586/03 (Silvia Hosse/ Land Salzburg)", ZESAR 2006, 452 - 459.

Overview I. Function and special aspects of coordinating health insurance law . . . . . II. Overview of the provisions of Reg. No. 883/2004 concerning sickness benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Two-tier approach: rights deriving from Reg. No. 883/2004 and directly from Art 56 TFEU and Directive 2011/24/EU concerning patients’ rights in cross-border healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Fundamentals: Freedom to provide services. . . . . . . . . . . . . . . . . . . . . . . . . . 2. Coexistence of Reg. and the Directive on the application of patients’ rights in cross-border healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Criteria for differentiation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Additional benefits according to national law . . . . . . . . . . . . . . . . . . . . . . . . 5. Overview of possible claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Overview IV. Material scope of Art. 17 et seq. – “Sickness and maternity benefits” . . 1. Benefits for the risk of sickness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Rehabilitation benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Employer liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Long-term care benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Benefits for disabled persons – sickness benefits, non-contributory benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Benefits for long-term incapacity for work due to sickness . . . . . . . . . 7. Paternity benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Organ donation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V. Problems of Reg. No. 883/2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI. Rights in the event of benefit deficits/illegal refusal of benefits pursuant to Reg. No. 883/2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII. Divergent/supplementary law based on regulations with individual States (Annex II of Reg. No. 883/2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Function and special aspects of coordinating health insurance law

Compared to other social benefits, sickness benefits have some special as- 1 pects that result in specific characteristics of coordinating Community Social Security Law where health insurance is concerned. The risk “sickness” is often of short duration and of a temporary nature and for this reason requires an equally short-term and trouble-free provision of benefits during a stay in another Member State. This was (and still is to some extent) secured by means of an extensive system of formalised proof of entitlement, notification and settlement forms (previously E 104-127, now verification documents S1-S3), and additionally by means of the European Health Insurance Card and in future the structured electronic documents. This is also secured by means of the system of provision of benefits in kind 2 by the institutions of the place of residence or stay. Health Insurance Law does not focus on easily exportable and, pursuant to Art. 48 lit. b) TFEU, cash benefits to be exported, such as sick benefits, but rather more on benefits in kind. However, benefits in kind are difficult to export. For these Community Law has decided on a solution found commonly in other instances of international Social Security Law (cf. Art. 20 et seq. European Agreements on Social Security; Schuler, Das Internationale Sozialrecht, p. 495 et seq.), namely that benefits in kind shall be provided on behalf of the competent institution by the institution of the place of residence or stay in accordance with the provisions of the legislation it applies, as though the persons concerned were insured under the said legislation. So we are concerned here with a selective integration into the foreign benefits scheme (Art. 17-20). Both the person insured and the provider of the benefits have considerable 3 scope when it comes to deciding whether the risk “sickness” has indeed occurred or not and which remedial benefits are necessary. For this reason the provider of the benefits in particular, but also the persons insured, are subject to intensive integration and control procedures at a national level, which however cannot be extended to the territory of another state. Here coordinating Commu-

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nity social security legislation has only regulated whether and how the entitlement to benefits of the person insured is determined and controlled in a Member State other than the competent Member State (Art. 27 Reg. No. 987/2009). 4 Contrary to most other benefit schemes a need for coordination arises not only when migrant workers cross borders in order to take up employment, but also for tourists and private persons who stay in another Member State for a short period of time or only temporarily or even if they are ill and travel to another Member State with the express purpose of receiving benefits in kind. For this reason the coordinating health insurance legislation of the Community has also included “migrant workers” as tourists and cross-border seekers of social benefits in the other Member States. II. Overview of the provisions of Reg. No. 883/2004 concerning sickness benefits

Unlike Reg. No. 1408/71, Reg. No. 883/2004 regulates benefits in kind in Arts. 17-20 separately from cash benefits which are addressed in Art. 21. The regulations for pension claimants and receivers of pensions and the members of their families are treated in great detail in Art. 22-30, because the home state of the competent institute with which they have their pension insurance (especially on the basis of former employment and contribution periods) and that has been responsible for their health insurance is very often different from the Member State in which they have now taken up residence. The general goal of the reform, namely to put pensioners and the members of their families on a par with active workers, has led to extremely complicated regulations here. So it is no surprise that the majority of reforms are to be found in this area. 6 In the case of persons residing permanently in another Member State than the competent Member State where they are insured or acquired the right to health benefits in kind Art. 17 contains the principle of benefits in kind being provided by the Member State of residence, whereby insured persons shall receive benefits in kind from the competent institution of the Member State of residence in accordance with the provisions applied by said Member State of residence. Should such persons be staying/be returning temporarily in the competent Member State, they are also entitled to benefits in kind here as though they resided in the Member State of the competent institution (Art. 18). Frontier workers are free to choose between benefits in the Member State of residence and the Member State of employment (now Art. 17 and Art. 18); this also applies to the members of their family (Art. 18 para. 2 with restrictions/reservations). Even as retired frontier workers they can continue treatment already begun in the Member State of employment (Art. 28). 7 Benefits in kind while staying abroad temporarily are divided into two articles. In accordance with Art. 19 an insured person staying in a Member State other than that of the competent institution (e.g. as tourist) is entitled to receive 5

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benefits in kind that become necessary on medical grounds during their stay from the institution of the place of stay, whereby medical necessity is based on the “nature of the benefits” and the “expected length of stay”, as was hitherto the case. Here too, there is integration into the benefits scheme of the provider of the benefits in compliance with the principle of the provisions of benefits in kind by the institution of the place of residence or stay. An insured person travelling to another Member State with the purpose of receiving benefits in kind (Art. 20) requires authorisation from the competent institution, such authorisation is to be accorded where the treatment in question is among the benefits provided for by the legislation of the competent institution/Member State of residence and where he/she cannot be given such treatment within a time limit which is medically justifiable, taking into account into account his/her current state of health and the probable course of his/her illness. Art. 21 regulates the export of cash benefits by the competent institutions in 8 the place of residence or stay of the insured person. In the common provisions for insured persons and pensioners, Art. 32 pre- 9 scribes that an independent right to benefits in kind always take priority over derivative rights to benefits in kind (from family maintenance relationships). As previously, Art. 33 includes a special provision for the granting of substantial benefits in kind. Art. 34 introduces a new priority regulation for such cases where the receiver of care benefits in cash from the competent institution is at the same time entitled to benefits in kind intended for “the same purpose” from the institution of the place of residence or stay. It prescribes that the amount of the cash benefit shall be reduced by the amount of the benefit in kind which is or could be claimed from the institution of the first Member State (responsible for the cash benefit). Art. 35 regulates the reimbursements between the institutions. III. Two-tier approach: rights deriving from Reg. No. 883/2004 and directly from Art 56 TFEU and Directive 2011/24/EU concerning patients’ rights in cross-border healthcare 1. Fundamentals: Freedom to provide services

In its judgements Kohll and Decker the CJEU again confirmed in 1998 its rul- 10 ings from 1984 in the Case Duphar, that the basic freedoms on principle and unrestrictedly also apply in the sphere of social security and the cross-border receipt of healthcare benefits, provided the EC Treaty itself contains no exceptions (Case C-238/82 (Duphar), EU:C:1984:45; Case C-158/96 (Kohll), EU:C: 1998:171, para. 19, 21 and Case C-120/95 (Decker), EU:C:1998:167, para. 23, 25). While the first judgements Kohll and Decker were restricted to national schemes that provided healthcare benefits primarily on the principle of cost remuneration, i.e. required market relationships, this case law was then extended to include schemes that only provide benefits in kind (Case C-157/99 (Smits and Peerbooms), EU:C:2001:404 and Case C-368/98 (Vanbraekel), EU:C:2001:400; Karl-Jürgen Bieback

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Case C-385/99 (Müller-Fauré), EU:C:2003:270) and then even to include national health schemes (Case C-372/04 (Watts), EU:C:2006:325, para. 88 et seq.; Case C-211/08 (Commission/Spain), EU.C:210:340). 11 The CJEU views the requirement of prior authorisation of a cross-border request for stationary hospital benefits and outpatient treatment (use of large equipment) justified would the request put at risk necessary healthcare planning in order to secure a „balanced medical and hospital service open to all“ and it’s quality and „financial balance” (Case C-157/99 (Smits and Peerbooms), EU:C: 2001:404, para 72 – 75; cf. Art. 8 Directive 2011/24/EU). 12 The right derived from Art. 56 TFEU does not otherwise change the right to healthcare benefits deriving from national law. Firstly, all (other) requirements of national legislation, upon which the right is based and that otherwise limit its extent (only specific treatments; patient co-payments etc.) must be submitted and observed (cf. Art. 7 para 7 Directive 2011/24/EU). In the event all claims to benefits are subject on principle to prior authorisation under national legislation, regardless of whether in the home country or abroad, then the authorisations or any other procedural requirements must be fulfilled (cf. Art. 7 para 2 (b) Directive 2011/24/EU). The amount of the costs that the insured person can claim from his/her competent institute in the Member State of affiliation, for example, is always decisive for the claim pursuant to Art. 56 TFEU (Case C-372/04 (Watts), EU:C:2006:325, para. 131/32; Case C-211/08 (Commission/Spain), EU.C:210:340, para. 56 et seq.; Case C-173/09 (Elchinov), EU:C:2010:581, para. 74-81; cf. Art. 7 para 4 Directive 2011/24/EU). In addition the upper limit is always the actual cost of the treatment incurred by the insured person in the Member State that provided the healthcare (cost of treatment including co-payments). Should the insured person have had to pay higher costs in the Member State that provided the healthcare than in the competent Member State, he/she can only demand reimbursement for the rates of the competent institution in the competent Member State. However, should the costs in the Member State that provided the healthcare be lower, because co-payments etc. apply here that the competent institution does not charge, then the insured person can demand reimbursement of these co-payments from the competent institution to the extent that the cost rate of the competent institution has not been reached (infra Art. 17 para. 14 et seq.; Case C-173/09 (Elchinov), EU:C:2010:581, para. 79.). Only the costs of the treatment are reimbursed, but not the costs associated with the journey and stay (Case C-372/04 (Watts), EU:C:2006:325, para. 134 et seq.). This quite rightly does not apply if such ancillary costs were provided for in the national territory but were not granted or had to be authorised separately in the case of a claim for treatment in another Member State (ibid., para.139). This would then again constitute an impermissible discrimination between treatment at home and abroad.

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2. Coexistence of Reg. and the Directive on the application of patients’ rights in cross-border healthcare

Directive 2011/24/EU on the application of patients’ rights in cross-border 13 healthcare was adopted on 9th March 2011 in order to clarify the application of the case law of the CJEU (OJ L 088 from 04/04/20011 p. 45 – 65). Just as the CJEU had already ranked the relationship between the claims deriving from Art. 56 TFEU to the provisions of the coordination of social security schemes in Reg. No. 883/2004 and its predecessor Reg. No. 1408/71 as equal (Case C-208/07 (von Chamier-Glisczinski), EU:C:2009:455, para. 62 et seq.; Case C-173/09 (Elchinov), EU:C:2010:581, para. 38), this same principle is once again expressly emphasised in Art. 2, m) and Art. 7 para 2 Directive 2011/24/EU and the recitals 28-33 in Directive 2011/24/EU: the Patients’ Rights Directive shall not affect Reg. No. 883/2004. Whereby according to recital No. 30 both must be applied alternatively and not cumulatively: “For patients, therefore, the two schemes should be coherent; either this Directive applies or the Union regulations on the coordination of social security schemes apply.“ 3. Criteria for differentiation

In its judgements the CJEU has summarised that Art. 17 and 19 applied to 14 cases of “unexpected treatment (in another Member State)” which are fundamentally different from the cases of “planned treatment (in another Member State)” that could be based solely on Art. 56 TFEU, whereby Art. 20 also remained applicable simultaneously (Case C-211/08 (Commission/Spain), EU.C: 210:340, para. 58 and 69; EuGH, Case C-512/08 (Commission/France), 2010:579, para. 26). This differentiation is problematic in that it is based exclusively on subjective factors for the “unexpected/planned” healthcare services required. This is not practicable. For this reason priority should be given to a differentiation according to objective criteria. Whereby all criteria for the type of cross-border mobility must be taken into consideration and ultimately an evaluation must be undertaken in accordance with the formula of the “prevailing” causality: which orientation dominated? Whereby this will usually involve only indications: start of the journey only after the occurrence of acute symptoms of a disease (then Art. 20 and Directive 2011/24/EU, as was the focus in the Case Klein, in: Hauck/Noftz, EU Social Security Law, Art. 20 para. 13), unless other unpostponable reasons can be proved (previously booked expensive journey, important business appointment, urgent scheduled work in another Member State and/or initially only mild symptoms). In this case claims are based on Art. 19. It is hardly possible to make a decision based on meaningful objective criteria 15 in the case of a chronically ill person requiring regular medical treatment or for whom such treatment is foreseeable, who goes to another Member State for work purposes or as a tourist/student, where both motives and aims, tourism and medical treatment, could even enjoy equal rights (health cure or dental renova-

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tion in another Member State). Such persons with mixed aims crossing borders could in principle make claims in accordance with Art. 20 or Art. 56 TFEU/ Directive 2011/24/EU. However, as such groups of persons enjoy complete freedom of movement like all other citizens of the EU, the Administrative Commission has, since Decision No. 123 from 24.2.1984 (OJ (EC) C 203 from 2.8.1984, s. 13 for dialysis patients) expressly placed these within the scope of the Regulation. Accordingly the Decision of the Administrative Commission No. S 3 from 12.6.2009 (OJ. C 106 from 24.4.2010, s. 40-41) to Art. 19 in No. 3 also assigned a stay in another Member State with availability of major treatment (kidney dialysis, oxygen therapy, special asthma therapy, echocardiography in the case of chronic autoimmune diseases, chemotherapy) to Art. 19 Reg. No. 883/2004. This is a solution for such mixed aims that is objectively justifiable, as assistance in the form of benefits in kind, the integration in the scheme of the Member State for the temporary stay, ensures optimum care. 16 The decision as to which rule should form the basis of the assessment of a situation ultimately falls to the institution first approached by the insured person: whether via the application for prior authorisation pursuant to Art. 20 (competent institution) or more often via an application for the reimbursement of costs. Such application can be submitted to the institution of the place of stay providing treatment (only for claims deriving from Art. 19 in conjunction with Art. 25 para. 4 Reg. No. 987/2009) or to the competent institution of the Member State of affiliation, that decides both on claims deriving from Art. 19 in conjunction with Art. 24 para. 5 to 7 Reg. No. 987/2009 as well acf.s claims based on Art. 20 in conjunction with Art. 25 para. 6 and 7 Reg. No. 987/2009 and claims in accordance with Art. 7 of Directive 2011/24/EU. In the case the insured person has a right of choice. 4. Additional benefits according to national law 17

Member States can grant other claims for cross-border availability of healthcare services over and above the rights derived from Reg. No. 883/2004 and Directive 2011/24/EU (cf. allg. EuGH, Case 69/79 (Jordens-Vosters), EU:C: 1980:7; Windisch-Graetz, 2003, P. 211, 215 et seq). In compliance with its legislation the competent institution can, for example, conclude contracts with foreign service providers for direct granting of benefits in accordance with the principle of benefits in kind and the legislation of the competent Member State. 5. Overview of possible claims

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The differentiation between Reg. No. 883/2004 and the claims deriving from Directive 2011/24/EU can therefore be summed up as follows:

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The Member State providing the treatment is not the Member State in which the person is insured/has gained entitlement to treatment in the case of illness Type of separation of Residence in the Mem- (Temporary) stay in the Journey to the Member State providing treatment for the express purpose of the competent Mem- ber State providing Member State providreceiving healthcare benefits ber State of affiliatreatment ing treatment (e.g. as a tion and the Member tourist) State providing the “Unexpected” treatment (in a different Member “Planned treatment (in a different Member State)” treatment State)” Type Art. 17/18 Reg. Art. 19 Reg. Art. 20 Reg. Art. 56 TFEU and Directive 2011/24/EU Right to provide ser- Requirements for the claim in accordance with the law of the competent Member State vices Provision of benefits in kind by the Member State in which the treatment takes Type and costs according to the law applicable in place on behalf of the competent Member State, i.e. full and equal integration the competent Member State; equal treatment in the benefits scheme of the Member State providing the treatment (could be with persons in the Member State providing the more or less than in the competent Member State) treatment Group of persons Persons entitled to benefits of the healthcare within the legal schemes of social Ditto security Prior authorisation None, simply proof of the insurance (health insu- Prior authorisation and None, except in the planned area rance card and doc. S1) proof by means of doc. S2 Reimbursement of In principle no payment in advance nor prior authorisation; payment in adPayment in advance; reimbursement of costs in costs/payment in ad- vance in the event of system failures in the Member State providing treatment compliance with the law applied in the Member vance by the insured Institutions reimburse the costs to each other directly State of affiliation person

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IV. Material scope of Art. 17 et seq. – “Sickness and maternity benefits” 1. Benefits for the risk of sickness

The material scope of Reg. No. 883/2004 is outlined in Art 3 (a) et. al. with “Sickness benefits” and in Art. 3 (c) with “Maternity and equivalent paternity benefits”. See above Art. 3 (b) para. 8 et seq. and recital 19 as well as Pennings 2015, 149 et seq.to this regulation. This definition focuses on the risk in a purpose-related manner and pays no attention as to how this benefit is institutionally allocated to the branches of insurance and the different institutions and stakeholders in the individual Member States. Essentially it must therefore be decisive to ensure the related purpose, the function of the benefit, the risk “sickness” and its consequences. The CJEU clearly clarified this point with the wording: “The distinction between benefits excluded from the scope of former Regulation (ECC) No. 1408/71 and those which fall within it is based essentially on the constituent elements of each particular benefit, in particular its purpose and the conditions on which it is granted, and not on whether a benefit is classified as a social security benefit by national legislation” (Case C-160/96 (Molenaar), EU:C:1998:84, para. 19; Case C-503/09 (Stewart), EU:C:2011:500, para. 35/6; critical Gassner, NZS 1998, 313). In addition the CJEU also puts forward functional arguments to the effect of not allowing any loopholes to arise in the classification of benefits and to include benefits in the system of risks mentioned in the Reg. Where it classifies a benefit under the Reg., it distributes them among different areas even “institution-related” and practically to the effect that those regulations are to be applied that are best suited for the coordination and materially adequate provision of benefits in a Member State other than the competent Member State. 20 This plurality of differentiating criteria has been made particularly evident recently with the inclusion of the risk of the reliance on care and the risk of longterm incapacity to work, both of which derive from the risk of sickness, although in addition these can also be linked with the risk of disability (infra para 23). In both cases the CJEU placed great importance on the criterion of the longterm nature of a disease and its consequences, actually classifying only the risk of short-term sickness as completely falling under Art. 17 et seq. Reg. No. 883/2004. In its judgment in the Case da Silva Martins (Case C-388/09 (da Silva Martins), EU:C:2011:439, para. 47/8) the CJEU made a distinction between “sickness benefits in a stricter sense” and those relating to care that are “not necessarily an integral part of these benefits” for sickness and that are also distinct from these in that they were granted long-term (see para. 14 et seq); the CJEU upheld this judgement in the Case C-562/10 (Commission/Germany), EU:C: 2012:442, para. 51 et seq. In the Stewart Case (Case C-503/09 (Stewart), EU:C: 2011:500, para. 35-54) a benefit for “short-term incapacity for work” was classified as an invalidity benefit for the purposes of Art. 4 (1) (b) Reg. No. 1408/71, 19

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because it would typically be continued as a long-term benefit (see para. 29 below). 2. Rehabilitation benefits

Based on functional arguments the CJEU classified benefits for medical reha- 21 bilitation (Case 69/79 (Jordens-Vosters), EU:C:1980:7; see Pompe, p. 177 et seq.) and the TBC-assistance of the German public pension scheme (Case 14/72 (Heinze)EU:C:1972:98; Case 16/72 (AOK Hamburg), EU:C:1972:100; Case 818/79 (AOK Mittelfranken), EU:C:1980:216; Pompe, p. 183 et seq.) as falling under “sickness benefits” in accordance with coordination legislation. The reason for this lies et. al. in the fact that although Reg. No. 1408/71 mentions rehabilitation benefits in Art. 1 (1)(b) among the invalidity benefits (“including those intended for the maintenance or improvement of earning capacity”) it made no specific provisions for their coordination in the regulations of invalidity and pension insurance. It was possible to apply a broad interpretation of the term “sickness benefits” to close this loophole for medical rehabilitation but not for occupational rehabilitation. The closing of this loophole is also objectively justifiable because as a rule such benefits are linked to a claim for benefits based on “sickness” and provide for the typical sickness benefits, namely medical treatment. Also the regulations concerning these “benefits in kind” based on the provision of benefits on behalf of another Member State found in Art. 17 et seq. are more adequate for occupational rehabilitation than the regulations concerning invalidity benefits in Art. 44 et seq., that only regulate the cash payment of pensions. All the more reason that such considerations should be applicable for Reg. No. 883/2004, as this no longer mentions rehabilitation benefits in Art. 3 and is therefore completely dependent on the expansive judgments of the CJEU in this respect. 3. Employer liability

The employer’s liability to continue payment of wages in the case of sickness 22 pursuant to the former German sickness benefit (Lohnfortzahlungsgesetz now Entgeltfortzahlungsgesetz) and the employer’s supplement to maternity benefits (§ 14 Mutterschutzgesetz) also fall under Art. 3 (1)(a) as well as Title III Chapter 1 of Reg. No. 883/2004, as the CJEU expressly emphasised with regard to the continuation of payment of wages in compliance with German legislation as per its predecessor Reg. No. 1408/71 (Case C-45/90 (Paletta I), EU:C:1992:236 and Case C-206/96 (Paletta II), EU:C:1996:182; Resch, ZIAS 1998, 215). They fall under the scope of Reg. No. 883/2004 if their purpose and conditions for their granting are to cover the risk of sickness or rather motherhood and if they are closely linked with the national schemes of social security in the case of sickness. As Art. 1 (q)(iv) clearly indicates, the fact that the employer grants and finances the benefits cannot remove these benefits from the scope of Reg. No. 883/2004 (as with regard to Reg. No. 1408/71 Case C-45/90 (Paletta I), EU:C: Karl-Jürgen Bieback

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1992:236). Even if this classification is correct when viewed from functional and objective systematic perspectives, is it nevertheless problematic when viewed from an objective practical perspective. Because the employer is not integrated in the system of “cooperation” between the institutions of social security and has no practical means of establishing the conditions for the benefits. 4. Long-term care benefits

Reg. No. 883/2004 now expressly regulates in Art. 1 (va) under “benefits in kind” that benefits in kind for long-term care also fall under sickness benefits in kind. Art 34 lays down a regulation for overlapping long-term care benefits. This is based on a very broad interpretation of “sickness benefits” by the CJEU, regardless of whether independent long-term care benefit schemes are concerned (Case C-160/96 (Molenaar), EU:C:1998:84; Case C-212/06 (Gouvernement wallon), EU:C:2008:178, Art. 39 Nr. 3, para. 15 et seq.= ZESAR 2009, 132 annotation Wallrabenstein;, para. 40; Case C-388/09 (da Silva Martins), EU:C: 2011:439; Case C-208/07 (von Chamier-Glisczinski), EU:C:2009:455EU:C: 2011:439, para. 44/5) or benefits in a different system (Case C-251/99 (Jauch), EU:C:2001:139, para. 28; Case C-286/03 (Hosse), EU:C:2006:125, para. 38 bis 44; Case C-299/05 (Commission/Parliament), EU:C:2007:608, para. 61, 70). This was justified by the argument that long-term care benefits had been provided by the health insurance scheme before, albeit to a very limited degree and clearly as an exception, and that the long-term care insurance is closely linked to health insurance with regard to membership, contribution law and its organisation. Institution-related arguments quite clearly prevail here as well as the aim of preventing the rise of any loopholes and of applying the appropriate provisions of Art. 17 et seq. to long-term care cash benefits and long-term care benefits in kind. When applying the Regulation this then leads to entitlements in the health insurance schemes of other Member States, that have no long-term care insurance or that assign long-term care benefits to (special) social security, having to be recognised as an entitlement in a Member State that has a long-term care insurance. 24 With its decision No. 175 from 23.6.1999 (OJ (EC) L 47 dated 19.2.2000, P. 23) the Administrative Commission provided a comprehensive definition of benefits in kind for those reliant on long-term care, that are to be regarded as benefits provided by the health insurance. These include the entire provision of medical and non-medical care services and aids etc. This decision is now reiterated in Art. 1 (va). A more precise means is given on page 5 of the Administrative Commission Decision from 2.10.2009, OJ C106 from 24.4.2010 s 54-55, that states (under I, 1) that “care insurance benefits in kind giving entitlement to full or partial direct payment of certain expenditure entailed by the insured person’s reliance on care and incurred for his or her direct benefit”, are also to be regarded as sickness benefits in kind and adds in this connection benefits “for help provided in the home or in specialised establishments (nursing care and 23

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home help), for purchases of care equipment, or work carried out to improve the home environment”. This is substantiated in the recitals as well as under I a of the Decision, that such benefits are essentially intended to supplement sickness insurance benefits in kind in order to improve the state of health and the quality of life of persons reliant on care. 25 The CJEU also upheld its position vis-à-vis – Austrian Federal Law on care allowance, which is paid to recipients of a pension or an old-age pension as a supplement to their pensions in order to compensate extra sickness-related expenses (Case C-251/99 (Jauch), EU:C: 2001:139). – the Salzburg care allowance (Case C-286/03 (Hosse), EU:C:2006:125), – the contributions of the German statutory and private care funds to the old age pension insurance of the carer pursuant to § 44 of SGB XI, in conjunction with the first sentence of § 3(a) and § 166(2) of SGB VI (Case C-502/01 und C-31/02 (Gaumain-Cerri and Barth), EU:C:2004:413) – and the Flemish care insurance scheme (Case C-212/06 (Gouvernement wallon), EU:C:2008:178, para. 15 et seq., 20). – Benefits granted to disabled persons, in particular disabled children or their carers, are to be regarded as sickness benefits for the purpose of Art 3 (1)(a) and not special contribution-independent benefits, which are excluded pursuant to Art. 79 (Case C-299/05 (Commission/Parliament), EU:C:2007:608, para. 53-56). This is contradictory to the judgment concerning disability benefits for young people in the UK (Case C-503/09 (Stewart), EU:C: 2011:500), in which the CJEU based its opinion on the long duration of the disease/disability and so regarded the benefit as an invalidity benefit. Stewart 2011 was concerned with a benefit to secure one’s livelihood or as income replacement, Commission/Parliament 2007 in contrast dealt with a carer’s allowance (see also para. 29 below). In all cases a more functional substantiation is now given, according to which 26 the aim of the benefits for those reliant on care is to improve the "the state of health and the quality of life of persons reliant on care”. This is an extremely general view, as in fact where the payment modalities and its restriction to those insured with social security are concerned the Austrian care allowance also served to compensate the general extra expenses of pensioners and state pensioners (cf. also Meier, comment in Eur. Journal of Business Law 2001, 314/5). Although the costs of pension and state pension insurances for care allowance are reimbursed by the state, in the view of the CJEU (Case C-251/99 (Jauch), EU:C:2001:139) care allowance is ultimately also financed by the health insurance. For this reason the CJEU did not recognise that Austrian care allowance had been listed in Annex II a of Art. 4 (2)(a) and (10) of the Reg. No. 1408/71. The CJEU rightly viewed the contribution paid by both statutory and private pension insurances of the carer as constituting an accessory benefit to the care

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allowance of the insured person – in its opinion – and that in the last instance this serves to cover the risk of reliance on care. 27 In the Case da Sliva Martins (Case C-388/09 (da Silva Martins), EU:C: 2011:439, para. 47/8) and confirmed again in the Case C-562/10 (Commission/ Germany), EU:C:2012:442, para. 51 et seq.the CJEU in part retracts this clear assignment in the case of conflict in which it was put forward that a Portuguese pensioner resident in Portugal who received a retirement pension from both Portugal and Germany and before his return to Portugal had received a care allowance from the German care allowance scheme had lost his German claims to benefits from the health insurance pursuant to Art. 27 Reg. 1408/71 (benefits from the institution of the Member State of residence; now Art. 23 Reg. No. 883/2004). The CJEU avoids this disadvantageous consequence of exercising the fundamental right of freedom of movement by now distinguishing between “sickness benefits in a stricter sense” and benefits relating to care that are “not necessarily an integral part of these benefits” for sickness and that are also distinct from these in that they were granted long-term. Despite the competence of the Portuguese health insurance institution pursuant to Art. 27 Reg. No. 883/2004, the care benefits from the German care allowance scheme could be exported to Portugal. Even though the referring German Federal Social Court (BSG) (BSG 22.4.2009 – B 3 P 13/07 R, NZS 2010, 218, Para 40) had had similar doubts concerning such preclusion from benefits and had considered a similar differentiation in care benefits, the CJEU has nevertheless been rightly criticised sharply for its newly discovered differentiation and loophole (Comment Osterholz, in: ZESAR 2012, 41-47). On the one hand because it enables care benefits in the Reg. to be included as sickness benefits in accordance with Reg. No. 883/2004, while on the other hand – and without any basis in Reg. No. 883/2004 – allows the conflict-of-law ruling and substantive legislation of the Reg. to be ignored depending on the situation or in order to prevent “protective loopholes” (so, for example the CJEU’s ruling in the Case Martins, para. 51-58 with regard to optional insurance in care insurance schemes with respect to Art. 15 (2) Reg. 1408/71/Art. 14 (2) Reg. No. 883/2004). 5. Benefits for disabled persons – sickness benefits, non-contributory benefits 28

According to Union legislation benefits paid by the German Länder to the blind, the deaf and the disabled are sickness benefits within the meaning of the Reg. because they are intended to compensate, in the form of a flat-rate contribution, for the additional everyday expenditure resulting from the recipients’ disability and because they have as their essential purpose supplementation of sickness insurance benefits (EuGH from 5.5.2011, Case C-206/10 (Commission/ Germany), EU:C:2011:283, para. 28/29). For this reason they may not be linked with requirements of residence and must be exportable for frontier workers. “Special non-contributory benefits” pursuant to Art. 70 are not concerned here, 204

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because these benefits are provided as a flat rate without any individual and discretionary assessment of personal needs (and neediness) and they apply to the risk of sickness in the Reg. (ibid. para. 27/8). It is of significance that the CJEU also examines infringements of the prohibition of discrimination in Art. 7 Reg. No. 1612/68 when (cross-border) frontier workers are concerned. 6. Benefits for long-term incapacity for work due to sickness

The risk of invalidity and invalidity pensions (Chapter 4, Art. 44 et seq) con- 29 stitute an area of overlapping in that invalidity can also be the result of an illness (or a disability). The CJEU ruled on the distinction to the effect that invalidity benefits covered the risk of a long-term disability involving a long-term incapacity for work (CJEU dated 21.7.2011, Case C-503/09 (Stewart), EU:C:2011:500, para. 35-54) while health insurance in contrast covered the short-term risk, without the court however indicating an exact time limit. It is incomprehensible and contrary to every objective interpretation of the risk (justifiably criticised by Reinhard, comment in ZESAR 2012, 92, 93/4) that the CJEU bases its argumentation on the individual case, i.e. the benefit is regarded as a long-term benefit even if it was originally granted for just one year but is in the specific case or typically followed by a long-term benefit. 7. Paternity benefits

Paternity benefits are an equivalent to maternity benefits when provided by 30 the scheme against sickness and linked to the role as a father, e.g. wage compensation if paternity leave is taken because a child falls ill. 8. Organ donation

The treatment of the donor is problematic in the case of living organ donation 31 in the event the donor and the recipient do not live in the same Member State. Is treatment of the donor even covered by the benefits scheme and if so, does it fall under the benefits for the recipient or treatment of the donor? The recommendation of the Administrative Commission s. 1 from 15.3.2012 (OJ C 240 from 10.8.2012, s. 3/4) pleads in favour of appropriate inclusion of the treatment of the organ donor in the health care scheme of the competent Member State of the recipient while at the same time ensuring the recipient is covered by the benefits scheme of his/her own Member State. A German draft law (German Bundestag Printed matter 17/7376) followed along exactly the same lines: living donors of organs shall be granted entitlement to medical treatment, rehabilitation and travel expenses vis-à-vis the health insurance fund of the organ recipient plus the entitlement to continuation of payment of wages for six weeks. The health insurance fund of the donor is competent for any secondary diseases.

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V. Problems of Reg. No. 883/2004

Overall the coordinating social security law of the EC does justice to the special requirements of health insurance law. The reform of 2004 has simplified and regulated more clearly coordination law in the area of health insurance (Voigt ZESAR 2004, p 73, 123-125). Where health insurance is concerned, the choice of a scheme of providing benefits in kind on behalf of another Member State (benefits of the Member State of residence or stay are provided) ensures “equal treatment” within a Member State and quick access to benefits in kind. However, it leads to provision being exclusively dependent on the legislation of the Member State of residence or stay with any deficiencies or “unusual” peculiarities that might apply in this Member State and against which the local inhabitants, but not the migrant, have prospectively insured themselves (e.g. by means of a supplementary private insurance). If high co-payments are the rule in the Member State of residence or stay or even no benefits at all (as is often the case with dental care), it is possible for the local inhabitants to protect themselves accordingly, but for the migrant this is often only possible under difficult conditions or involves additional costs. However, all problems of freedom of movement cannot be rectified by coordination law such as Community law, just as not all advantages have been annulled nor all the disadvantages of freedom of movement rectified (cf. Case C-208/07 (Chamier-Glisczinski), EU:C:2009:455; in detail Rennuy CMLR 2013, 1221). 33 There are deficits in several areas of the legislative regulations of Title III, Chapter 1: (1) Firstly where coordination with the fundamental freedoms is concerned. In addition to the scheme of the provisions of benefits in kind by the institution of the place of residence or stay and in part reimbursement of costs pursuant to Arts. 17, 19 and 20 there is still a direct entitlement to the reimbursement of costs based on the freedom of the provision of services pursuant to Art. 56 TFEU/Directive 2011/24/EU, which for the most part refutes the regulations of Art. 20 (see para. 10 et seq.and 18 below) has not integrated this entitlement in coordination law. (2) In view of the very incoherent coverage of the risk of reliance on care it is reasonable to doubt whether it is appropriate to include this risk in the Reg. No. 883/2004 as a sickness benefit, because no general consensus exists yet within the Community in this respect and very different forms of coverage exist making these very difficult to coordinate. In addition only those benefits of the Member States are coordinated that cover the reliance on care via an insurance or benefit for national citizens, the schemes of social assistance however remain excluded from the coordination (Art. 3(5) Reg. No. 883/2004). On the other hand the schemes for the reliance on care are still too incoherent, so that the scheme of the provision of benefits on behalf of another Member State cannot provide an adequate solution (cf. the impossibility of coordinating the benefits in kind provided in Germany with the cash benefits provided in Austria in the judgements 32

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of the CJEU in Case C-208/07 (von Chamier-Glisczinski), EU:C:2009:455 and Case C-388/09 (da Silva Martins), EU:C:2011:439; Case C-562/10 (Commission/Germany), EU:C:2012:442). For this reason a commission of experts correctly demanded the formulation of a separate chapter for these benefits, in order to achieve an appropriate solution (Jorens u.a., 2011, passim to the peculiarities and security loopholes as well as to Part III, p. 43 et seq. of the reform; cf. also Spiegel, ZESAR 2013, 209). (3) Reg. No. 883/2004 contains no regulation pertaining to the distribution of risk in the event of abuse of the European health insurance card (Kreutzer 2010, p. 70). (4) The different co-payment schemes in the Member States lead to hardly justifiable disadvantages, in particular where a temporary stay pursuant to Art. 19 and 20 is concerned. Co-payment made in the Member State providing the treatment is offset with the co-payment and its social structure in the competent Member State (Kreutzer, 2010, p. 75), whereas this could be more easily compensated pursuant to Directive 2011/24/EU. (5) There are significant deficits where administrative coordination on the 34 part of the institutions providing the benefits are concerned and with the implementation of the regulations. The provision of benefits in kind in the case of residence in another Member State by the institution of the Member State of residence on the basis of registration with it functions well, because in this case the insured person receives a proof of benefits from his/her local institution which is binding for the local provider of the benefits in the other Member State. (see Art. 17 para. 14 ed seq. and 21 et seq. below). However, this is not true for the provision of benefits in kind in the case of a (temporary) stay in another Member State (see Art. 19 para. 11 et seq. below). The E 111 or European Health Insurance Card as forms of verification are very often not accepted by the provider of the benefits and the insured persons are forced to pay for the benefits themselves and then have the costs reimbursed by their competent institution on their return to their home State (cf. para. Art. 17 para. 25 et seq. and Art. 19 para. 26 et seq. below). According to a survey of the Techniker Krankenkasse in Germany (Techniker Krankenkasse, 2001 and 2008) the processing of treatment in another Member State did not comply with the model of the Reg. The scheme of the provision of benefits in kind on behalf of another Member State for cases of treatment in a hospital was applied in less than 50% of such cases (2001); and more or less not at all where outpatient treatment was concerned. In the majority of cases the insured persons paid the costs themselves and had these returned by the competent institutions of the German health insurance scheme on their return to their home state. On the one hand the reason for this functional deficit was that formerly the insured persons themselves did not request an E 111 form – a deficit that should by now have been rectified after the introduction of the European Health Insurance Card in 2004. On the other hand the normal process of providing benefits in kind on behalf of another Member State is not accepted by Karl-Jürgen Bieback

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the local insurance institutions or providers of the services in some countries (notably Spain, Austria, France and Italy). Coordinating law must be flanked here by national regulations which implement acceptance of the European Health Insurance Card and the other certificates proving entitlement as binding proofs of entitlement to benefits and which provide the bearers of such the same access to the benefits as the insured persons of the Member State of residence or stay. Whereby the 2007 survey indicated even more so than the one undertaken in 2001 that there is great willingness among insured persons to seek cross-border benefits in neighbouring countries. This applies in particular for pharmaceuticals and medicines as well as specialist medical treatment and health cures. 35 (6) More incentives should also be created, that would encourage institutions providing benefits on behalf of another Member State to develop a proper and efficient provision of the benefits in kind in their own self-interest. This is blatantly obvious in particular in instances where the employer is the “competent institution”, but is very difficult to integrate into the process and has hardly any means of checking the conditions (infra Art. 21 para. 6 and 8 et seq.). There is as yet no procedural law for the cooperation of transnational institutions providing benefits, although the new Reg. now includes far more and better regulations in Art. 76 et seq. 36 (7) Finally deficits also exist in view of the significant problems foreigners experience when trying to gain equal access to healthcare services (cf. Overview in Razum u.a., Deutsches Ärzteblatt 2004, B 2439). A purely coordinating social security law is inadequate here to guarantee substantive equal treatment and unhindered mobility. What is also needed is a foreigner-specific expansion of the procedural rights of those entitled to benefits. VI. Rights in the event of benefit deficits/illegal refusal of benefits pursuant to Reg. No. 883/2004 37

Coordination law provides no conflict resolution mechanism for the conflict pertaining to whether a right to benefits derives from Art. 17 (residence outside of the competent State) or 18 et seq.(stay outside of the competent State) or from Art. 19 or 20 (a stay generally or a stay for the purpose of receiving benefits in the Member State providing treatment) and that different proofs or institutions and procedures could be pertinent. However, the conflict must not be at the expense of freedom of movement. In the event the competent institution does not issue a health insurance card or not in a timely manner, refuses a prior authorisation or does not grant this in a timely manner, the insured person has the right to demand the benefit in the Member State providing the treatment, which the institution providing the benefit/ the institution at the place of residence may not refuse, but must decide on the basis of its applicable legislation whether it can and must grant the benefit. It can then potentially demand reimbursement from the competent institution (cf. also Windisch-Graetz, 2003, p. 227/8). The insured

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person can bring action against the competent institution, the institution at the place of residence and the institution at the place of stay respectively, and force the relevant institutions in a legally binding manner to issue the certification to which he/she is entitled or to make the necessary decisions or grant the benefits. In the case of deficits in the provision of benefits on the part of the institution 38 providing such on behalf of another Member State, e.g. this institution does not provide the benefit or not in a timely manner or refuses to do so, it would indeed contradict the spirit and purpose of coordinating social security law to establish additional legal claims, should the person entitled to the benefit be referred solely to claims against the institution providing the benefit on behalf of the other Member State. In fact the competent institution remains obliged to provide the benefit and a solution based on national legislation must be found. In such cases coordination legislation provides for the special right of the insured person to reimbursement from the competent institution of the costs for benefits in kind provided in another Member State without observance of the procedure of submitting the certifications and registration with the institution in the other Member State (Art. 25 (4) and 5 Reg. No. 987/2009). VII. Divergent/supplementary law based on regulations with individual States (Annex II of Reg. No. 883/2004)

Annex II of Reg. No. 883/2004 lays down older conventions agreed between 39 the Member States that are to remain in force, although in the majority of cases these refer to pension insurance and not to health insurance. With one exception: Reg. No. 883/2004 applies fundamentally with regard to Switzerland, but Annex II also lists a special agreement such as that with Germany concerning social security dated 25.2.1964. There is no entry for Switzerland in Annex III of Reg. No. 883/2004 (“Restrictions of rights to benefits in kind of the family of a frontier worker”).

Section 1 Insured persons and members of their families, except pensioners and members of their families Article 17 Residence in a Member State other than the competent Member State An insured person or members of his/her family who reside in a Member State other than the competent Member State shall receive in the Member State of residence benefits in kind provided, on behalf of the competent institution, by the institution of the place of residence, in accordance with the provisions of the legislation it applies, as though they were insured under the said legislation.

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Part 2: Regulation (EC) No 883/2004 Article 22 Reg. No. 987/2009 General implementing provisions (1) The competent authorities or institutions shall ensure that any necessary information is made available to insured persons regarding the procedures and conditions for the granting of benefits in kind where such benefits are received in the territory of a Member State other than that of the competent institution. (2) Notwithstanding Article 5(a) of the basic Regulation, a Member State may become responsible for the cost of benefits in accordance with Article 22 of the basic Regulation only if, either the insured person has made a claim for a pension under the legislation of that Member State, or in accordance with Articles 23 to 30 of the basic Regulation, he receives a pension under the legislation of that Member State. Article 23 Reg. No. 987/2009 Regime applicable in the event of the existence of more than one regime in the Member State of stay or residence If the legislation of the Member State of residence or stay comprises more than one scheme of sickness, maternity and paternity insurance for more than one category of insured persons, the provisions applicable under Articles 17, 19(1), 20, 22, 24 and 26 of the basic Regulation shall be those of the legislation on the general scheme for employed persons. Article 24 Reg. No. 987/2009 Residence in a Member State other than the competent Member State (1) For the purposes of the application of Article 17 of the basic Regulation, the insured person and/or members of his family shall be obliged to register with the institution of the place of residence. Their right to benefits in kind in the Member State of residence shall be certified by a document issued by the competent institution upon request of the insured person or upon request of the institution of the place of residence. (2) The document referred to in paragraph 1 shall remain valid until the competent institution informs the institution of the place of residence of its cancellation. The institution of the place of residence shall inform the competent institution of any registration under paragraph 1 and of any change or cancellation of that registration. (3) This Article shall apply mutatis mutandis to the persons referred to in Articles 22, 24, 25 and 26 of the basic Regulation.

I. Spirit and Purpose and History of Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Difference between benefits in kind and cash benefits . . . . . . . . . . . . . . 2. Personal and material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Personal scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Material scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Provision of benefits in kind on behalf of another Member State. . . a) Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Requirements for a claim to benefits pursuant to the legislation of the Member State providing the benefits in kind and the competent State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Deficits in the case of differences in the right to benefits . . . . . . . . d) Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e) Binding effect of the certification and medical findings . . . . . . . . . . 4. Consequences of non-executed or refused provision of benefits in kind to be provided by one Member State on behalf of another . . . . 5. Clarification of the system of the provision of benefits in kind by one Member State on behalf of another Member State to be applied pursuant to Art. 23 Reg. No. 987/2009. . . . . . . . . . . . . . . . . . . . . . . 6. Resolution of conflicts between differing entitlements pursuant to Title III Chapter 1 (health insurance). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 4 4 7 7 12 14 14 16 18 21 23 25 28 29

I. Spirit and Purpose and History of Origin 1

The health insurance laws of most of the Member States of the EU apply only nationally (principle of territoriality). Only those persons insured under national law and who are located in the Member State in which the insurance exists are entitled to benefits. International coordinating social security law – such as EU social security law – overrides this territorial restriction and confers rights to

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benefits on the insured person even if he/she is located outside of the State in which he/she is insured. The “competent institution” remains liable for the benefits. “Competent institution” is defined in Art. 1(q) as the institution with which the person concerned is insured or from which the person concerned is or would be entitled to benefits if he/she resided in the Member State in which the institution is situated. Whereby Art. 17 to 22 regulate rights to benefits in kind and Art 21 rights to cash benefits in the case of sickness. Art. 17 applies to the case where an insured person or the members of his/her family are insured with an institution of social security in one Member State (“competent institution”), but stay permanently, i. e. reside in another Member State (“Member State of residence” pursuant to Art. 1(j)). These concern frontier workers and posted workers for the most part. Art. 18 regulates the case where the person concerned or the members of his/her family stay temporarily in the Member State of the “competent institution”, but reside in a different Member State than that of the “competent institution”. Art. 19 regulates the case where the insured person or the members of his/her family stay temporarily in a Member State other than the competent Member State (holiday, business purposes etc.). Finally Art. 20 regulates the case of the provision of benefits in kind in the event the insured person or the members of his/her family stay in a Member State other than the competent Member State for the purpose of receiving medical benefits in kind. Art. 21 regulates the export of cash benefits. The procedure for the benefits differs depending on whether a benefit in kind 2 pursuant to Art. 17 et seq. is concerned or a cash benefit pursuant to Art. 21. In the case of benefits in kind Art. 17 establishes the principle that persons entitled to such benefits and the members of their family who reside in a Member State other than that in which they are insured and/or entitled to benefits in kind receive the right to benefits in kind from the health insurance of the competent institution of the Member State of residency and that they are integrated in the scheme of the Member State of residency (provision of benefits in kind on behalf of another Member State). Pursuant to Art. 21 cash benefits are in contrast exported to the Member State of residence by the competent institution in accordance with the legislation it applies. However, the competent institution may also commission the institution of the Member State of residence to effect the payment. This regulation for the provision of sickness benefits corresponds to a great extent with that for the provision of medical benefits relating to accidents at work or occupational diseases. Art. 17 includes no final regulation for the procedure for the benefits or the 3 institution providing the benefits. Firstly the national legislation can in addition to Reg. No. 883/2004 also designate the competent institution as the party liable for the provision of benefits in the secondary instance and thus create an additional entitlement for the insured person. This does not remove the regulatory function of coordinating social security law, but gives the insured person another right based on the favourability principle (Windisch-Graetz, 2003, p. 211, 215 et Karl-Jürgen Bieback

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seq. correctly with reference to Case 69/79 (Jordens-Vosters), EU:C:1980:7). The CJEU has ruled in many judgements that coordinating social security law does not give a final regulation for the claims of insured persons, but that Member States can also grant additional more favourable claims (see Preamble to Art. 17 (10) et seq. above). These are now generally the claims based on Directive 2011/24/EU (see Preamble to Art. 17 para. 10 et seq., 18) above). II. Commentary 1. Difference between benefits in kind and cash benefits 4

In the inserted Art. 1 (va)(i) representing the common position from 17.12.2008 Reg. No. 883/2004 gives a final definition of benefits in kind in the case of sickness in that they “are intended to supply, make available, pay directly or reimburse the cost of medical care and products and services ancillary to that care". In this respect the Reg. follows the final definition of this term by the CJEU (Case C-208/07 (von Chamier-Glisczinski), EU:C:2009:455, para. 48; Case C-466/04 (Acereda Herrera), EU:C:2006:405, para. 29 et seq.; Case 33/65 (Dekker), EU:C:1965:118; Case 61/65 (Vaassen-Goebbels), EU:C:1966:39; Case C-160/96 (Molenaar), EU:C:1998:84, para. 31; thereto Pennings 2015, 151 et seq.; Watson, p. 204 et seq.; Gassner, NZS 1998, 313). Cash benefits mostly have the function of replacing income (Case C-160/96 (Molenaar), EU:C: 1998:84, para. 31) or apply solely to payment obligations, such as the contribution to the health insurance of pensioners or the payment of a contribution to the pension insurance for carers. Key criteria of the CJEU include that – payment is made periodically and is not subject to certain expenditure having already been incurred, – the amount concerned is fixed and independent of the costs actually incurred by the recipient in meeting his/her daily requirement – and that the recipient has considerable freedom where the use of the care allowance is concerned. In the view of the CJEU benefits in kind refer to personal healthcare services as well as medicines and medical aids, even if the health insurance pays cash for these as part of cost reimbursement or payment of costs (Case C-466/04 (Acereda Herrera), EU:C:2006:405, para. 29 et seq.; Case C-160/96 (Molenaar), EU:C: 1998:84, para. 31; Case 61/65 (Vaassen-Goebbels), EU:C:1966:39). If cash benefits are intended to cover the purchase of healthcare services or to reimburse expenses paid for these medical services (reimbursement of costs), then these are also to be regarded as benefits in kind (Case C-466/04 (Acereda Herrera), EU:C:2006:405 para. 29 et seq., 35; Case 75/63 (Unger), EU:C1964:19); so also Decision S6 of the Administrative Commission with commentaries from 22.12.2009 OJ C 107 from 27.4.2010 p. 6-7. Transport costs are benefits in kind, see below Art. 19 para. 16.

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In principle Community law decides on whether a benefit is a benefit in kind 5 or a cash benefit in compliance with the definition in Art. 1(va). But where reimbursement of costs is concerned, Decision S 6 of the Administrative Commission from 22.12.2009 OJ C 107 from 27.4.2010, S 6-7, determines that what constitutes a benefit in kind is to be defined in compliance with the legislation of the institution providing the benefit on the basis of Reg. No. 883/2004. However, the Decision itself determines under 3) that the costs of prescriptions or processing of an application or co-payment towards the costs, for example, do not fall under a “benefit in kind”. According to German law the care allowance in § 37 SGB (Social Security 6 Code) XI can be regarded as a surrogate for healthcare benefits in kind (so German Bundestag-printed matter 12/5262, p. 110 to § 30 (1) and p. 112 to § 33 (1)). As the insured persons can dispose of the care allowance with complete freedom and because its granting is not subject to whether expenses were actually incurred for the care and to what amount, the CJEU has rightly classified the care allowance as a cash benefit (in the case of sickness), so that it must also be exported pursuant to the Reg. (Case C-160/96 (Molenaar), EU:C:1998:84; confirmed in Case C-466/04 (Acereda Herrera), EU:C:2006:405, para. 29 et seq.). The CJEU subsequently reaffirmed this position again vis-à-vis care allowance according the Austrian Federal Law on care allowance, which is paid to recipients of pensions and old-age pensions as a supplement to their pensions in order to compensate extra sickness-related expenses (Case C-251/99 (Jauch), EU:C: 2001:139, para. 23 et seq.) and the Salzburg care allowance (Case C-286/03 (Hosse), EU:C:2006:125 with additional comment. Windisch-Graetz, ZESAR 2006, 457), which should then apply to the contributions of the German statutory and private care funds to the pension insurance of the carer (Case C-502/01 und C-31/02 (Gaumain-Cerri and Barth), EU:C:2004:413). 2. Personal and material scope a) Personal scope

Contrary to Art. 45-48 TFEU(= Art. 39-42 EC) and also contrary to the prede- 7 cessor Reg. No. 1408/71, Reg. No. 883/2004 no longer applies only to gainfully employed persons, i.e. workers and self-employed persons, but more generally to insured persons and the members of their families. So Art. 17 et seq. also encompasses non-employees who are integrated in the statutory health insurance scheme (for workers/the gainfully employed) in compliance with the health insurance law of the Member States (e.g. students, voluntary members). Art. 1(c) defines an “insured person” as any person satisfying the conditions required under the legislation of the Member State competent under Title III to have the right to benefits. This can also be a residence requirement or citizenship for statutory health schemes. Art. 23 et seq. concerns regulations applicable just for

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pensioners which are largely adapted to Art. 17 et seq. See para. 10 below for the term “member of the family”. 8 Art. 17 also encompasses workers who have not yet taken up gainful employment in their new place of residence in the other Member State. Even in such a case the claim that he/she has gained as an employed person in the competent State, should not be forfeited solely due to his/her mobility (see Case C-215/90 (Twomey), EU:C:1992:117 with ref. to Case 302/84 (Ten Holder), EU:C: 1986:242). This principle must also apply even if he/she has given up his/her status as a worker, but still has continued claims to benefits due to his/her former worker status. Contrary to the old legislation in Art. 25 Reg. No. 1408/71, the new legislation provides no special regulation for the unemployed. Pursuant to the general case law of the CJEU pertaining to Art. 45 TFEU (= Art. 39 EC; see Case 249/83 (Hoeckx), EU:C:1985:139, para. 20 et seq.; Case C-85/96 (Martinez Sala), EU:C:1998:217, para. 34), they in fact remain workers for as long as they seek gainful employment and therefore fall under Art. 17. 9 Residence in a Member State means a place where a person habitually resides, (Article (1) (j)) whereas stay (in which case Art. 19 and 20 are applicable) means temporary residence (Article (1) (k)). Residence and stay are mainly distinguished by the duration and continuity of presence on the territory of the other Member States. However even more than 11 years in another Member State because of severe illness may not be regarded as residence, if the other relevant factors (cf. Art. 11 Reg. No. 987/2009) have to be taken into account, e.g. not having learnt the language of the other country, no property in the other country, constant will and plans to return (Case C‑255/13, (I), EU:C:2014:1291). Posted workers and the members of their families for whom the social security legislation of the State from which they were posted continues to apply pursuant to Art. 12 also fall under Art. 17. The decision as to whether these persons are only staying in the other Member State “temporarily” – i.e. in compliance with Art 1 (j) and (k) they do not have a “place of residence” such as that required by Art. 17 – or whether they only have a place of stay in the other State can only be made on the basis of the duration of the posting and not on the status of being a posted worker. If they only stay in the other Member State for a short period of time, they are deemed to have their place of stay there and are therefore subject to Art. 18 to 20. 10 Art 17 expressly includes the members of the family of a worker, regardless of whether they live together with the worker or whether they live separated from him/her in a Member State other than the competent State (e.g. members of the family of a migrant worker that remain at home; the members of the family of a frontier worker). In compliance with Art. 1 (i), (ii) (traditionally) it is in principle the legislation applied in the State providing the benefit that determines who is deemed a “member of the family”. However, where the scheme of the provision of benefits in kind on behalf of another Member State is concerned this is divided between the Member State of residence and the competent State.

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For this reason the CJEU has ruled: in as far as the requirement of the insurance obligation and the fundamental existence of a claim to benefits is concerned, the term member of the family is decided by the legislation of the “competent State” – i.e. the State where the insurance exists, normally the State of employment (Case C-451/93 (Delavant), EU:C:1995:176, para. 15 et seq.). Only for the determination of the type of benefit, modalities of the benefit and ancillary obligations etc. is the health insurance legislation of the Member State of residence providing the benefit decisive. cf. Windisch-Graetz, 2003, p. 184 et seq. In this respect the CJEU has correctly referred to Art. 17 Reg. No. 574/72 (corresponds for the most part with Art 22 and 24 implementing Reg. No. 987/2009), whereby the competent State alone shall decide in a binding manner the status of insured person and eligibility for benefits and where it must be assumed that it applies its legislation and certifies e.g. a co-insurance that would not be accepted under the legislation of the State of residence due to the high income of the co-insured person. This objectively meaningful case law should also be adhered to for the new legislation, because the definition of the term and the manner of integration in the scheme of providing benefits in kind on behalf of another Member State have not changed from the old to the new Reg. and the objective reason, the splitting of the applicable legislation between the competent State and the State of residence, has remained (different opinion, completely only for the legislation of the State of residence, Klein, in: Hauck/Noftz, EU-Sozialrecht, Art. 17 para 7; Bokeloh, ZESAR 2014, p. 168, 171). This is also practicable: the competent institution certifies the status of (co-) insured person in the portable S 1 document according to its own legislation, such certification also being binding for the State providing benefits in kind on behalf of a different Member State. Where claims pursuant to Art. 19 and 20 are concerned this is the only possible appropriate path that can be taken (cf. Art. 9 para 9 above and Art. 20 para 19 below). If the members of the family go to the competent State, which has regulated the insurance of the frontier worker working in the competent State as well as the (co-) insurance of the members of his/her family, these also have claims against the health insurance institution in the competent State (Art. 18 (2) Reg. 883/2004). However, the competent State can exclude the obligation to provide the benefits by means of an entry in Annex III of Reg. 883/2004. For this see Art. 18 below. However, attention must be paid to the regulation laid down in Art. 32: inde- 11 pendent rights of the members of the family take priority (see annotations there). There were formerly different regulations for the reimbursement of costs for members of the family: if the employed person and his/her family members lived together outside of the competent State, then pursuant to Art. 93 Reg. No. 574/72 the actual costs incurred at the place of residence were reimbursed. If the members of the family lived separately from the insured person, but the insured person lived in the Member State of the competent institution, then pursuant to Art. 93 Reg. No. 574/72 the costs for the members of the family were compenKarl-Jürgen Bieback

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sated on the basis of a fixed amount, insofar as no special agreements had been made. This regulation has also been adopted in the new legislation in Art. 63 (2) implementing Reg., whereby it is now clearer that this fixed amount should be as close as possible to the actual expenditure. On principle the competent institution of the employed person also bears the financial burden for benefits in kind provided for the members of the family of the employed person. b) Material scope

Even the old Reg. applied for the liabilities of the employer (Case C-45/90 (Paletta I), EU:C:1992:236 and Case C-206/96 (Paletta II), EU:C:1996:182), as these were fully integrated in the Reg., so that the “competent institution” for the purposes of the Reg. was also the employer (s. Art. 1(o)(iv) Reg. (ECC) No. 1408/71, more generally Art. 3 (30)). So Art. 17 also applies to employer liabilities, although these rarely concern benefits in kind. 13 Art. 19 Reg. No. 1408/71, the predecessor regulation of Art. 17, applied only to those cases in which the insured risk/insured event did not occur until the employed person or the members of his/her family had taken up residency in a Member State other than the competent State. If the insured event had already occurred in the competent State and the insured person transferred his/her place of residency to a different State after such occurrence, then according to Art. 22 (1)(b) authorisation was required for transferring residency if the benefits were to be continued. This is now no longer required. Art. 19 and 20 apply only to cases of (temporary) stays in another Member State. Taking up residency in another Member State is no longer treated separately, but is regulated entirely in Art. 17. 12

3. Provision of benefits in kind on behalf of another Member State a) Principle 14

In the case of residency (Art. 17) or a stay (Art. 19) in another Member State Reg. No. 883/2004 ensures social protection in that sickness benefits in kind are granted to the insured person in the Member State of residence or stay to the same conditions as apply for persons affiliated to the scheme of social security in the Member State of residence or stay (see Case C-156/01 (van der Duin), EU:C:2003:389, para. 50; Case C-145/03 (Keller), EU:C:2005:211, para. 45; Case C-208/07 (von Chamier-Glisczinski), EU:C:2009:455, para. 35 et seq., 65). The legislation of the competent institution is decisive for the requirements for membership and the existence of a claim, i.e. the State in which the insurance was established and that is as a rule the State of employment. Are these requirements met then benefits in kind are provided by the institution in the place of residency as if the employed person or the members of his/her family were entitled to benefits from this institution. This also entails that the institution providing the benefits in kind for the other Member State decides according to the leg-

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islation it applies about the existence of cases of benefits/insurance events, e.g. the differentiation between an illness and simple reliance on healthcare or the assignment of certain symptoms to an illness (such as addiction, for example). For this reason the legislation applied by the institution providing the benefits in kind for the other Member State defines the claim event (sickness, motherhood), the type of the benefit in kind, the kind and the modalities and the scope of the provision of the benefits (cf. Case C-451/93 (Delavant), EU:C:1995:176, para. 14). The same applies to members of the family (Case C-451/93 (Delavant), EU:C:1995:176, para. 15). However, loopholes in insurance protection could arise if the benefit in kind in the competent State of affiliation is not provided for in the legislation of the institution in the Member State of residence providing the benefits in kind (see para. 18). On the other hand the fundamental principle of the provision of benefits in kind on behalf of another Member State in the case of a place of residence other than the competent State of affiliation undergoes significant modifications if the insured person residing in another Member State returns to the State of the competent institution, especially in case of frontier workers (Art. 18), pensioners (Art. 28) and substantial benefits in kind (Art. 33). See the Preamble to Art. 17 para. 22-27 for the problems of the provision of benefits in kind on behalf of another Member State. This cooperation involving the different institutions and regulations leads to a 15 triangular relationship. The status relationship, upon which the right to benefits is based, exists between the competent institution and the insured person(s); whereby it is essentially the legislation of the competent Member State of affiliation that applies here. If the provision of benefits on behalf of another Member State is unsuccessful in the Member State providing the treatment, the insured person has the right to claim reimbursement directly vis-a-vis the competent institution (para. 25 and Art. 19 para. 26 et seq.and 32 et seq. below). The treatment and benefit relationship between the institution providing the benefits in kind on behalf of another Member State and the insured person(s) depends on the legislation of the institution providing the benefits in kind in the Member State of treatment in conjunction with coordination law (Art. 22-24 Reg. No. 987/2009). Essentially the relationship between the competent institution and the institution providing the benefits in kind on behalf of the other Member State depends on Art. 35 and Art. 62-69 Reg. No. 987/2009 plus any additional agreement made between the Member States. b) Requirements for a claim to benefits pursuant to the legislation of the Member State providing the benefits in kind and the competent State

Art. 17 (1) clearly indicates that the conditions for receiving benefits in kind 16 fundamentally linked with membership pursuant to the legislation of the competent State must be completely fulfilled if cash benefits and benefits in kind are to be provided in the State of residence. So a migrant insured and entitled to benefits pursuant to the legislation applied by his/her competent institution in the Karl-Jürgen Bieback

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home State, retains this status in the territory of the State providing the benefits, even if he/she would not be insured or entitled to benefits according to its legislation. The legislation contains a fictive insurance instance (“as though they were insured under the said legislation”, i.e. under the legislation of the State of residence providing the benefit in kind on behalf of the other Member State). Not only the differences in personal scope, e.g. of social security schemes for nationals, depend on the legislation of the competent institution in the Member State of affiliation, but also the question of subsequent insurance cover on leaving the insurance (Case 75/63 (Unger), EU:C1964:19) or the (free) co-insurance of members of the family (Case C-451/93 (Delavant), EU:C:1995:176), as well as the entire origin, lapsing and cancellation of the insurance relationship and the related questions of the amount, burden and payment of the contributions. 17 The “status or fundamental relationship”, which depends on the legislation of the competent institution of the Member State of affiliation, also includes special conditions for rights to benefits, which are inherent in the insurance relationship itself, such as the duration of the insurance, payment of special contributions, registration for special benefit programmes etc. However, coordination law supplants the conditions of residence or stay which grant the insured person a right to benefits only if he/she has his/her place of residence in the State of the competent institution. These requirements of residency or stay are invalid as they infringe against Art. 45 et seq. and Art. 4 and 7 TFEU. For this reason the CJEU denies such place of residence or stay clauses any validity (cf. only to the territorial restriction of the German healthcare legislation Case C-160/96 (Molenaar), EU:C:1998:84, para. 39 and 44, or the Salzburg healthcare allowance 2006:125). c) Deficits in the case of differences in the right to benefits 18

The principle of the provision of benefits in kind on behalf of another Member State is therefore particularly effective in such cases where there is no congruence in the right to benefits between the State of the competent institution and the Member State of residence. This leads to the possibility of the benefit in kind in another Member State deviating significantly from that that would have to be provided under the legislation of the competent institution. In view of the level of high insurance coverage and the extensive scheme of benefits in one State, this can lead to significant gaps in coverage, particularly in the case of postings abroad in another State with reduced coverage and benefit-schemes. On the other hand migrant workers receive benefits that would, for example, not be granted under the legislation of their competent institution, such as dental prostheses without any co-payment (see in this respect the list of benefits under Art. 19 (2) and the Decision of the Administrative Commission No. S 8 from 15.6.2011 OJ C 262 from 6.9.2011, p. 6-7 (formerly No. 135 dated 1.7.1987 OJ (EG) C 281 dated 4.11.1988, p. 7)). The CJEU regards any partial disadvantage for the fundamental freedoms that might be inherent in the scheme of the provi218

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sion of benefits in kind on behalf of another Member State as justified (most recently Case C-388/09 (da Silva Martins), EU:C:2011:439, para. 72 et seq.), see Preamble to Art. 17 para. 10 et seq. above. Such a discrepancy between the legislation of the State of the competent insti- 19 tution and the legislation of the institution providing the benefits should according the opinion of the CJEU (Case C-208/07 (von Chamier-Glisczinski), EU:C: 2009:455, para. 35 et seq.) also occur if the competent (German) institution only provides for a right to benefits in kind (accommodation of a person reliant on care in a home), while the legislation of the place of residence (Austria) only provides for cash benefits (care allowance as an aid to purchasing the benefit or support for the related increased costs of living). In this case the competent institution is not obliged to export the benefit to the Member State of residency, when pursuant to its legislation it does not have to provide a cash benefit (healthcare allowance in the case of a stay in a care home) or to provide a benefit in kind that does not exist pursuant to the legislation of the State of residence. The competent institution also does not have any subsidiary responsibility in such a case and must, for example, provide a cash benefit or reimburse the related costs (CJEU ibid para. 88). The discrepancy arises because benefits in kind and care benefits are subject to different “regimes”: Benefits in kind are not to be exported nor can they be, but must instead be provided “locally” pursuant to the legislation of the Member State of residence, while cash benefits (healthcare allowance) must be exported. To a limited extent the equal treatment of benefits, income, facts or events in 20 Art. 5 can help in cases of differences in regulations for benefits and the modalities of the benefits. It leads to the possibility of a co-payment made in the other Member State being taken into account up to the amount of the upper limit in the competent State when calculating the total sum of co-payments. d) Procedure

The procedure is regulated in detail in Art. 22 et seq. implementing Reg. and 21 Decision S6 of the Administrative Commission from 22.12.2009 (OJ C 107 from 27.4.2010, p. 6-7). Pursuant to Art. 22 implementing Reg. the insured person has a right to information from the competent institution concerning the procedures and conditions of his/her claim to benefits in kind in another State. Art. 24 (1) implementing Reg. stipulates that the insured person is obliged to register with the health insurance institution in his/her place of residence. The document S1 (formerly the documents E 106 and E 109) is used to certify the entitlement of the insured person and the members of his/her family to claim benefits. The institution in the place of residence is obliged to notify the competent institution of the registration. The competent institution uses the document S 016 (formerly E 108) to notify the institution in the place of residence of any changes in the entitlement (see Decision S 6 from 22.12.2009, OJ C 107 from 27.4.2010, p. 6-7). In the event the competent institution refuses to reimburse Karl-Jürgen Bieback

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the costs, the institution providing the benefits/institution in the place of residence cannot refuse the benefit, but must decide whether it can or must grant the benefit on the basis of its legislation (cf. also Windisch-Graetz, 2003, p. 227/8). 22 Alone the issuance of the document S 1 (formerly E 121) does not constitute entitlement to benefits in kind in the Member State of residence, as the CJEU regards this document as having only a declaratory character indicating that the person concerned would have an entitlement to benefits in kind vis-à-vis the competent institution did he/she reside in the Member State of the competent institution (Case C-345/09 (van Delft et al), EU:C:2011:57, para. 61; Case C-202/97 (Fitzwilliam), EU:C:2000:75, para. 50; Case C-178/97 (Banks et al), EU:C:2000:169, para. 53). An entitlement vis-à-vis the institution providing the benefit in kind on behalf of the other Member State only arises when the certifying document is submitted and subsequent registration has taken place. This is the formal administrative condition for exercising claims in the Member State of residence (Art. 24 (1) implementing Reg.; cf. Case C-345/09 (van Delft et al), EU:C:2011:57, para. 63). Insured persons cannot avoid this consequence nor any contribution obligations in the Member State of the competent institution by not registering in the place of residence; according to the legislation of the competent State they remain liable for insurance and for contributions, even if they can make no claim to benefits in kind in the State of residence. e) Binding effect of the certification and medical findings

Art. 24 (2) implementing Reg. lays down the effect of certification of membership (S1) which repeats the generally binding effects of certification of the institution vis-à-vis the other Member State pursuant to Art. 5 Reg. No. 987/2009, but goes further in that it stipulates that this is binding not only for the institution providing the benefit in kind but also for the competent institution. It is comprehensive and is the basis for the liability of the competent institution to reimburse costs in relation to the institution of the place of residence; it is also applicable to the institution of the place of residence, whose obligation to provide benefits in kind it defines. This is clarified by the CJEU explaining the function of the certificates in a number of its rulings (Case C-202/97 (Fitzwilliam), EU:C:2000:75; Case C-178/97 (Banks), EU:C:2000:169; Case C-2/05 (Herbosch Kiere), EU:C:2006:69 with additional comments in Horn, ZESAR 2006, 229-231). This settled case law concerning the binding effect for both parties was based on the E 101 certificate, but applies equally to the S1 form. 24 It is a justifiable consequence of the scheme of the provision of benefits in kind by one Member State on behalf of another Member State that by issuing the forms the competent institution automatically accepts the treatment of its insured member by the authorised physicians of the Member State of residence and must therefore also accept the therapeutic decisions made by these physicians (Case C-145/03 (Keller), EU:C:2005:211, para. 43 et seq. to the forms E 111 and E112 23

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and the decisions of the Member State of stay). This applies especially where the assessment of the necessity of an urgent treatment is concerned and any related decision to move the insured person to a different (third Member) State if this is the only place where the necessary treatment can be administered. The competent institution of the Member State of affiliation cannot demand that the insured person returns to his/her competent Member State, nor that he/she acquires the approval for the medical decisions of the attending physicians in the Member State of residence, nor that the insured person must undergo an examination by a physician of its choice in the Member State of residence (ibid. para. 56-8). In the view of the CJEU this even includes the necessary costs of treatment in a third State, if these have to be reimbursed in compliance with the legislation of the institution providing the benefits. The CJEU refused to accept the argument of the need to control social security expenditure, because the fact that the medical treatment is provided outside the Member State of residence or stay does not put the competent (Spanish) institution in a different situation from that in which the same treatment would have been provided in that Member State. Art. 26 (3) s. 2 implementing Reg. once again emphasises the binding effect of medical findings, submitted by the institution in the place of residence or stay concerning “the need for urgent vitally necessary treatment”, for the special case of Art. 20, which must also be applied here. 4. Consequences of non-executed or refused provision of benefits in kind to be provided by one Member State on behalf of another

Neither Reg. No. 1408/71 nor Reg. No. 883/2004 or Reg. No. 987/2009 pro- 25 vided or provide an explicit solution in the case that, contrary to the desired effect of the scheme of the provision of benefits in kind by one Member State on behalf of another Member State, the insured person pays for the benefit in kind himself/herself. However, if the scheme of the provision of benefits in kind by one Member State on behalf of another Member State is unsuccessful in cases that fall under Art. 19 and 20, entitlement to reimbursement of costs is regulated intensively: Art. 25 (4-6) Reg. No. 987/2009 for the case of Art. 19 and Art. 20 (7) Reg. No. 987/2009 for the case of Art. 20 of the Reg. – and namely without the reason for the failure being required (see Art. 19 para. 26 ed seq. and Art. 20 para. 32 below). There are two solutions offered for Art. 17. The assumption here is that in accordance with Reg. No. 883/2004 the (secondary) entitlement against the institution providing the benefit in kind replaces the original (primary) entitlement vis-à-vis the competent institution. – Pursuant to Art. 17 liability for the provision of the benefit in kind lies sole- 26 ly with the institution of the place of residence. Similar to the original entitlement to benefits in kind, the new (secondary) entitlement deriving from the failure to provide the benefit must be directed against the institution of the place of residence providing benefits in kind in accordance with the legislation of its State. As the insured person is resident in the Member State Karl-Jürgen Bieback

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where treatment is provided, he/she can generally enforce this claim; however, the case is different for Art. 19 and 20 because the insured person is generally staying in the Member State where treatment is provided for a temporary period only. This solution also complies with the principle of the provision of benefits in kind by one Member State on the behalf of another Member State, namely complete equality of treatment with the nationals of the Member State providing the treatment. This is the perception of the Reg., which also explains why there is no regulation for the case that the provision of the benefit in kind by the other Member State fails. A second approach assumes that deficits in the provision of benefits by the institution providing the benefit would contradict the spirit and purpose of coordinating social security law to establish additional legal entitlements, if the person entitled to the benefit in kind were referred solely to the claims against the institution providing the benefit on behalf of the other Member State. A solution that did not encroach or only proportionally so on the insured person’s exercising of his/her fundamental freedoms (in the case of Art. 17 freedom of movement and freedom to provide services in the case of Art. 19) would be to revive the primary entitlement in addition to the entitlements deriving from Art. 25 (4 and 5) Reg. No. 987/2009 and to also give him/her the right to claim reimbursement from the competent institution. Where national legislation is concerned this solution would also have the advantage of giving national lawmakers the opportunity of creating additional entitlements over and above those in the Reg. Tis is in accordance with the decision of the CJEU that an insured person who has paid the costs himself/herself has the right to have these costs reimbursed directly by the competent institution, provided the costs of the benefit were to be born according to the legislation of the institution providing the benefit and the competent institution was obliged to reimburse him/her such costs (Case C-145/03 (Keller), EU:C:2005:211, para. 69).

27 –

5. Clarification of the system of the provision of benefits in kind by one Member State on behalf of another Member State to be applied pursuant to Art. 23 Reg. No. 987/2009 28

Art. 23 implementing Reg. stipulates that if the legislation of the Member State of residence comprises more than one scheme of health insurance so that as a rule several institutions would be eligible, then the general institution of the scheme for employed persons shall be the institution to provide benefits on behalf of other Member State. This rule is appropriate, because the majority of claimants are affiliated with the more general schemes in the competent State and the general institution of the scheme for employed persons would be the most efficient from an administrative point of view. If there is no general scheme or no longer a general institution, then the claimants must be given the

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freedom to choose between different schemes and institutions in the same way as nationals. 6. Resolution of conflicts between differing entitlements pursuant to Title III Chapter 1 (health insurance)

Please see the Preamble to Article 17 para 6 et seq. and 18 for the conflict 29 pertaining to whether a right to benefits derives from Art. 17 (residence outside of the competent State) or 18 et seq.(stay outside of the competent State) or from Art. 19 or 20 (a stay generally or a stay for the purpose of receiving benefits) and therefore different proofs or institutions and procedures could be pertinent.

Article 18 Stay in the competent Member State when residence is in another Member State – special rules for the members of the families of frontier workers (1) Unless otherwise provided for by paragraph 2, the insured person and the members of his/her family referred to in Article 17 shall also be entitled to benefits in kind while staying in the competent Member State. The benefits in kind shall be provided by the competent institution and at its own expense, in accordance with the provisions of the legislation it applies, as though the persons concerned resided in that Member State. (2) The members of the family of a frontier worker shall be entitled to benefits in kind during their stay in the competent Member State. Where the competent Member State is listed in Annex III however, the members of the family of a frontier worker who reside in the same Member State as the frontier worker shall be entitled to benefits in kind in the competent Member State only under the conditions laid down in Article 19(1). I. Spirit and Purpose and History of Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Personal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Unrestricted entitlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Restrictions for members of the family (para. 2) . . . . . . . . . . . . . . . . . . . . . 4. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Transitional legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 3 3 4 5 6 7

I. Spirit and Purpose and History of Origin

Art. 18 is an exception to Art. 17: for insured persons, who in principle do not 1 reside in the competent Member State but in a different Member State and who are “registered” in the Member State of residence (see Art. 17 para. 21 above). When these persons stay (return) temporarily in the competent State (see Art. 1 (k)) where they receive benefits in kind, these shall be provided by the competent State at its own expense and according to the provisions of the legislation it applies. Without the regulation of Art. 18 these persons would perhaps have no entitlement to benefits in kind under national health insurance legislation, be-

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cause very often schemes with a national health service in particular require residency in the Member State providing treatment as a rule, which is not the case here. In addition Art. 18 gives everyone, who will generally stay regularly in the State of the competent institution such as frontier workers in particular, the freedom of choice to receive benefits in kind not only in their place of residence but also in their place of employment in the competent State of affiliation when they stay there. 2 Art. 18 para. 1 and Art. 18 para. 2 s.1 also give the members of the family not residing in the competent State the right to claim benefits in kind from the institution of the insurance in the competent State while staying in the competent State. However, Art. 18 para.2 s.2 again makes an exception in this respect. Please refer to Art. 17 para. 10 and 16 above for the term member of the family and for the determination of their status as insured persons. For the very first time Reg. No. 883/2004 has also created a special rule for the health insurance entitlements of retired frontier workers. II. Commentary 1. Personal scope 3

See Art. 17 para. 7 et seq. for the personal scope. There are special rules for pensioners in Art. 27 and Art. 28. “Stay” according to the definition in Art. 1 (k) is “the temporary residence”, cf. there para. 21 et seq. Frontier worker according to the definition in Art. 1 (f) is any person pursuing an activity as an employed or self-employed person in a Member State (State of the competent institution = competent State of affiliation) and who resides in another Member State to which he/she returns as a rule daily or at least once a week. There are no changes to the term members of the family as defined basically in Art. 1 (i) (Art. 17 para. 10 above); Pennings 2015, 157 et seq. The status as (co-) insured person and therefore also the status of member of the family depends on the legislation of the competent State. This means that within the scope of Art. 18 the competent State is not liable to provide for persons who according to its legislation are not members of the family and who could not go to the State of residence with an entitlement to claim benefits (different opinion and solely according to the legislation of the State of residence: Klein, in: Hauck/Noftz, EUSozialrecht, Art. 18 para. 7 and Schreiber, in: Schreiber u.a., VO (EG) Nr. 883/2004, 2012, Art. 17 para. 7). 2. Unrestricted entitlement

4

In the case of a (temporary) stay in the competent State the entitlement to claim benefits in kind (see Art. 17 para. 4 et seq.) depends entirely on the legislation of the competent State, as if those persons were resident in this State (i.e. they habitually resided there, see Art. 1 (j)). This fictive residence has the effect of invalidating conditions and restrictions in the State of residence. The insured 224

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persons can, for example, therefore claim benefits in kind which although they do not have to be guaranteed by the institution of the place of residence do however have to be guaranteed by the competent institution in accordance with its health insurance legislation. In other words there is full integration into the benefit legislation of the competent State. 3. Restrictions for members of the family (para. 2)

Pursuant to Art. 18 the obligation of the competent institution to provide 5 benefits in kind for members of the family staying in the competent State is no longer restricted. However, by making an entry in the list in Annex III the competent State can restrict is obligations towards members of the family to the “necessary” benefits in kind (see Art. 19 para. 11 et seq.). This is justified by the fact that the members of the family do not have such close ties to the competent State and Member State of affiliation, mostly the main insured person’s place of employment, as the main insured person himself/herself. The following countries are entered in Annex III without time restriction: Denmark, Ireland, Finland, Sweden and the UK. Entries and provisos for Estonia, Spain, Italy, Lithuania, Hungary and the Netherlands shall have effect only for a transitional period of four years after the date of application of Reg. No. 883/2004, i.e. up to 30.10.2014. 4. Procedure

No special procedural legislation is applicable here, as the benefits in kind are 6 only claimed in the State in which the insured status exists. The procedural law pertaining to Art. 17 is not applicable (different opinion: Schreiber, in: Schreiber u.a., VO (EG) Nr. 883/2004, 2012, Art. 18 para. 8), as Art. 18 only concerns the provision of benefits on behalf of another Member State in the case of temporary stays. So – unlike the granting of benefits in kind pursuant to Art. 17 – neither proof of the status of insured person nor registration is required. III. Transitional legislation

According to Art. 87 (10 b) the exception clause for the equal treatment of 7 members of the family for the Member States in Annex III must be reviewed no later than the 31.10.2014 on the basis of a report by the Administrative Commission.

Article 19 Stay outside the competent Member State (1) Unless otherwise provided for by paragraph 2, an insured person and the members of his/her family staying in a Member State other than the competent Member State shall be entitled to the benefits in kind which become necessary on medical grounds durKarl-Jürgen Bieback

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Part 2: Regulation (EC) No 883/2004 ing their stay, taking into account the nature of the benefits and the expected length of the stay. These benefits shall be provided on behalf of the competent institution by the institution of the place of stay, in accordance with the provisions of the legislation it applies, as though the persons concerned were insured under the said legislation. (2) The Administrative Commission shall establish a list of benefits in kind which, in order to be provided during a stay in another Member State, require for practical reasons a prior agreement between the person concerned and the institution providing the care. Article 25 Reg. No. 987/2009 Stay in a Member State other than the competent Member State A. Procedure and scope of right (1) For the purposes of the application of Article 19 of the basic Regulation, the insured person shall present to the health care provider in the Member State of stay a document issued by the competent institution indicating his entitlement to benefits in kind. If the insured person does not have such a document, the institution of the place of stay, upon request or if otherwise necessary, shall contact the competent institution in order to obtain one. (2) That document shall indicate that the insured person is entitled to benefits in kind under the conditions laid down in Article 19 of the basic Regulation on the same terms as those applicable to persons insured under the legislation of the Member State of stay. (3) The benefits in kind referred to in Article 19(1) of the basic Regulation shall refer to the benefits in kind which are provided in the Member State of stay, in accordance with its legislation, and which become necessary on medical grounds with a view to preventing an insured person from being forced to return, before the end of the planned duration of stay, to the competent Member State to obtain the necessary treatment. B. Procedure and arrangements for meeting the costs and/or providing reimbursement of benefits in kind (4) If the insured person has actually borne the costs of all or part of the benefits in kind provided within the framework of Article 19 of the basic Regulation and if the legislation applied by the institution of the place of stay enables reimbursement of those costs to an insured person, he may send an application for reimbursement to the institution of the place of stay. In that case, that institution shall reimburse directly to that person the amount of the costs corresponding to those benefits within the limits of and under the conditions of the reimbursement rates laid down in its legislation. (5) If the reimbursement of such costs has not been requested directly from the institution of the place of stay, the costs incurred shall be reimbursed to the person concerned by the competent institution in accordance with the reimbursement rates administered by the institution of the place of stay or the amounts which would have been subject to reimbursement to the institution of the place of stay, if Article 62 of the implementing Regulation had applied in the case concerned. The institution of the place of stay shall provide the competent institution, upon request, with all necessary information about these rates or amounts. (6) By way of derogation from paragraph 5, the competent institution may undertake the reimbursement of the costs incurred within the limits of and under the conditions of the reimbursement rates laid down in its legislation, provided that the insured person has agreed to this provision being applied to him/her. (7) If the legislation of the Member State of stay does not provide for reimbursement pursuant to paragraphs 4 and 5 in the case concerned, the competent institution may reimburse the costs within the limits of and under the conditions of the reimbursement rates laid down in its legislation, without the agreement of the insured person. (8) The reimbursement to the insured person shall not, in any event, exceed the amount of costs actually incurred by him/her. (9) In the case of substantial expenditure, the competent institution may pay the insured person an appropriate advance as soon as that person submits the application for reimbursement to it. C. Family members (10) Paragraphs 1 to 9 shall apply mutatis mutandis to the members of the family of the insured person.

I. Spirit and Purpose, Fundamental Structure and History of Origin . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Personal and material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Provision of benefits in kind on behalf of another Member State and the necessary benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Substantial benefits in kind Art. 19 (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Procedure in compliance with Art. 25 (1-2) Reg. No. 987/2009 and practice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Article 19 5. The insured person’s entitlement to reimbursement (Art. 25 (4)(5) Reg. No. 987/2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Reimbursement by the institution of the place of stay according to its rates (Art. 25 (4) Reg. No. 987/2009). . . . . . . . . . . . . . . . . . . . . . . . b) Reimbursement by the competent institution according to the rates of the institution of the place of stay (Art. 25 (5) Reg. No. 987/2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Reimbursement by the competent institution according to its rates (Art. 25 (6 and 7) Reg. No. 987/2009) . . . . . . . . . . . . . . . . . . . . . . . 6. Disputes concerning entitlements between claims pursuant to Art. 19 on the one hand and 20 or 17 on the other . . . . . . . . . . . . . . . . . . .

26 31 32 33 35

I. Spirit and Purpose, Fundamental Structure and History of Origin

Contrary to the basic regulation of Art. 17, Art. 19 and Art. 20 cover the pro- 1 vision of benefits in kind for insured persons and their members of the family who do not reside in another Member State but only stay temporarily in the other Member State (Art. 1(k)). From these “cases of temporary stays” Art. 19 regulates a general temporary stay, e.g. as a tourist, or business traveller etc. and Art. 20 a stay for the express purpose of (only) receiving treatment in another Member State (see Art. 17 para. 14 et seq. and 18 above). The regulations and commented provisions in Art. 17 and implementing Reg. concerning the provision of benefits in kind by the Member State of residence or stay also apply on principle to Art. 19. The requirements here are, however, a little more restrictive than those of Art. 17 in that Art. 19 only grants entitlement to “necessary” benefits in kind; the verification and control procedure of the entitlement to benefits in kind is also regulated differently. Art. 22 (1)(a) of the old text of the predecessor regulation Reg.No. 1408/71 2 contained only one special requirement in contrast to the basic regulation of the provision of benefits in kind by the Member State of residence or stay in Art. 19 Reg. No. 1408/71 (now Art. 17), namely the requirement that the “condition necessitates immediate benefits”. Similar in content, but clearer was the new wording introduced in Reg. No. 631/2004 (OJ (EU) L 100 from 6.4.2004, s. 1et seq), that the benefit in kind must be “necessary”. This has also been adopted in the present Reg. No. 883/2004. The former term “immediate” allowed varying interpretations and there were complaints that the practice in the individual Member States deviated significantly, in particular when an expensive stay in hospital in another Member State was necessary. Regarding benefits in kind as “immediate” only where an “urgent” or even “emergency” was concerned (see also WindischGraetz, 2003, p. 234) or when the medical condition was so serious that the insured person could not be expected to return to the Competent State did not comply with the protected freedom of movement and an interpretation in line with freedom of movement as laid down in Art 22 (1)(a) Reg. No. 1408/71. The Commission wanted to grant only “immediately necessary benefits in kind” in its Draft (COM (1998) 779 finally, OJ C 038 dated 12.2.1999, p. 10), but was not able to enforce this tie with the much criticised predecessor norm.

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Reg. No. 631/2004 added the paragraph 1 a to Art. 22 Reg. No. 1408/71, which corresponds to today’s Art. 19(2). This clearly indicates that even large, complicated medical treatment, such as dialysis, should not constitute a barrier to cross-border mobility (cf. also recital No. (5) of Reg. No. 631/2004). However, there is no longer any authorisation procedure for substantial benefits in kind such as that required in Art. 17 (7) Reg. No. 574/72. 4 Please refer to the Preamble to Art. 17 para 14 et seq. and 18 and Art. 20 (para 1 and 3) above for the differentiation between Art. 19 and Art 20. The present wording of Art. 20 is a special case and an exceptional provision to Art. 19. For this reason the judgements to the provisions of the old legislation, that provided for a more equal weighting of the claims, should only be called upon with reservation. All the same the old principle also applies here, namely that the question as to whether the stay in another Member State serves the sole purpose of receiving treatment or not, i.e. that Art. 20 or Art. 19 are applicable, is to be decided by the national courts based on the basis of their actual appraisals (Case C-326/00 (IKA), EU:C:2003:101, para. 31 et seq. und Case C-156/01 (van der Duin), EU:C:2003:389, para. 34 et seq.). 5 Since the judgements of the CJEU in the Case Kohll and Decker there are two ways of claiming cross-border benefits in the case of a temporary stay in a Member State other than the State of the competent institution (cf. EuGH, Case C-56/01 (Inizan), EU:C:2003:578, para. 15 et seq.; more detailed information thereto above in the Preamble to Art. 17 para. 10 et seq.): there are other entitlements in addition to those pursuant to Reg. No. 883/2004. Art. 56 TFEU in connection with the Directive 2011/24/EU directly give rise to a right to cross-border benefits in compliance with the legislation of the competent institution for reimbursement of the costs of the benefit received in another Member State to the amount of the actual costs incurred up to a maximum of the rates that the competent institution would have had to pay under its applicable legislation. See above Preamble to Art. 17, para. 10 et seq. 6 As a rule no competition arises between the two entitlements, as the CJEU has limited the entitlements from the fundamental freedoms to targeted crossborder receipt of healthcare services. In contrast Art. 19 regulates the case where treatment becomes necessary during a stay not undertaken for medical reasons (See above Preamble to Art. 17,para. 14 et seq). The Decision of the Administrative Commission No. S3 dated 12.6.2009 (OJ. C 106 dated 24.4.2010, s. 40-41) to Article 19 determines accordingly under No. 2: “Benefits in kind – including those in conjunction with chronic or existing illnesses or in conjunction with childbirth – are not covered by these provisions (Reg. No. 883/2004 / author’s note) when the objective of the stay in another Member State is to receive these treatments.” And in Decision S1 dated 12.6.2009 OJ. C 106 dated 24.4.2010, s. 23-25 the Administrative Commission once again determined the function of the European Health Insurance Card that is necessary according to Art. 19: “ (8) The European Health Insurance Card can be used in all situations of temporary stay 3

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during which an insured person requires benefits in kind irrespective the purpose of the stay, be it for reasons of tourism, professional activity or study. (10) The European Health Insurance Card does not cover sickness benefits in kind in situations where the aim of the stay is to receive medical treatment.” Whether a person only occasionally receives healthcare benefits during a tem- 7 porary stay in another Member State, in which case Art. 19 Reg. No. 883/2004 applies, or purposely claims healthcare benefits, in which case Art. 20 and/or the Patient’s Rights Directive 2011/24/EU applies is decided solely on objective criteria (see above Preamble to Art 17 para. 14 et seq.). Whereby all criteria for the type of cross-border mobility must be taken into consideration and ultimately an evaluation must be undertaken in accordance with the formula of the “prevailing” causality: which orientation dominated? Whereby this will usually involve only indications: start of the journey only after the occurrence of acute symptoms of a disease (then Art. 20 and Directive 2011/24/EU), unless other unpostponable reasons can be proved (previously booked expensive journey, important business appointment, urgent scheduled work in another Member State and/or initially only mild symptoms). These indications suggest entitlements in compliance with Art. 19 Reg. No. 883/2004. Whereby the entitlement deriving from Art. 19 as well as all secondary legis- 8 lation itself must be interpreted and where applicable modified from the point of view of the freedom of citizens to provide services in Art. 56 TFEU. See above Preamble to Art. 17 para. 10). II. Commentary 1. Personal and material scope

To the material scope (“benefits in kind”) cf. Art. 17 para. 4 and to personal 9 scope Art. 17 para. 7 et seq. The entitlement of pensioners to healthcare during a temporary stay in another Member State is regulated in Art. 27. For application with regard to members of the family cf. Art. 17 para. 10. Family members are entitled to have benefits in kind provided by the Member State of stay on behalf of the competent Member State even if they do not reside in the competent but in another Member State (e.g. the family members of a frontier worker). The only expedient solution here is to allow the competent State to decide on the status of insured person in compliance with its legislation and to allow the European Health Insurance Card to be solely sufficient and binding for the competent State’s certification of such. Because due to the urgency with which the benefit is required the Member State providing the benefit in kind on behalf of another Member State can only depend on such certification from the competent State. Art. 19 applies exclusively to a temporary stay (definition in: Art. 1 (k)) in a 10 Member State other than the competent State. Persons staying temporarily in another Member State include among others tourists, visitors, transients (as employed and self-employed persons or tourists) and persons seeking employment Karl-Jürgen Bieback

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with no fixed residence. In the event the temporary stay changes to a permanent stay and the insured person establishes his/her residence in this State in accordance to the systematics of Reg. No. 883/2004 pursuant to Art. 1 (j), then the provisions of Art. 17 apply (see above Preamble to Art. 17 para. 14 et seq.and 18). Residence and stay are mainly distinguished by the duration and continuity of presence on the territory of the other Member States. However even more than 11 years in another Member State because of severe illness may not be regarded as residence, when the other relevant factors (cf. Art. 11 Reg. No. 987/2009) have to be taken into account (Case C-255/13 (I), EU:C:2014:1291). 2. Provision of benefits in kind on behalf of another Member State and the necessary benefits

Fundamentally, Art. 19 grants a right to the provision of benefits in kind by the institution of the place of stay on behalf of another Member State. This institution is the institution that “is competent to provide benefits … in the place where the person concerned … is staying according to its legislation” (Art. 1(r)). The provision of benefits therefore complies with the model of providing benefits in kind on behalf of another Member State, see Art. 17 para. 14 et seq. Whereby the decision-making authority is divided: by issuing the Health Insurance Card the competent institution decides on the existence of insurance protection (below para. 19 et seq. and above Art. 17 para. 16 et seq.), while the institution providing the benefit in kind decides on all the other special benefit conditions of Art. 19, in particular the criterion of the medical necessity for the benefit in kind (below para. 24). 12 The condition of the insured person must render the benefits in kind “medically necessary". This is an evaluation of the “means-end relation” usual for evaluating proportionality, only in this case not applied with the aim of minimising an infringement of freedoms but instead to determine which treatment is required, namely the relationship between the state of health and the necessary benefits in kind. This complies with the wording on the sole basis of medical criteria. However, the nature of benefit in kind and the length of the planned stay must be expressly taken into account here. The CJEU has already bound both of the above under the old legislation in such a way that only those benefits in kind can be claimed that cannot be postponed until the return (Case 237/78 (Toia), EU:C:1979:197). Decision S3 expressly determines this in the recitals 1-3 (Decision of the Administrative Commission No. S3 dated 12.6.2009 (OJ. C 106 dated 24.4.2010, s. 40-41 “Only medical factors within the context of a temporary stay, taking into account the medical condition and personal history of the person considered, shall be taken into consideration”). 13 As Art. 19 is intended to protect the freedom of movement, an insured person must not be forced to return home after refusal of health insurance benefits in kind, as Reg. No. 987/2009 Art. 25(3) now also expressly states. On the contrary the far more rigid requirement of “immediacy” was also dependent on the 11

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planned length of the stay (cf. even under the old legislation Haverkate/Huster, 1999, para. 171 and previous editions; see also Windisch-Graetz, 2003, p. 234). If a longer stay was planned, then the necessary medical benefits in kind must be more extensive than in the case of a shorter stay. Accordingly Decision Nr. S 3 of the Administrative Commission from 14 12.6.2009 (OJ. C 106 from 24.4.2010, s. 40-41) correctly determines under 1.: “Benefits in kind to be provided under Articles 19(1) and 27(1) of Regulation (EC) No 883/2004 and Article 25(A)(3) of Regulation (EC) No 987/2009 shall include benefits provided in conjunction with chronic or existing illnesses as well as in conjunction with pregnancy and childbirth”. This also follows in the steps of the case law of the CJEU (Case C-326/00 (IKA), EU:C:2003:101), in that the unforeseen sudden occurrence of an illness is not decisive, as such an interpretation would infringe on the fundamental rights of sick citizens of the EU. In the case of slight medical disorders, only minor measures to treat the 15 symptoms are necessary. If the illness is serious, extensive benefits that treat the underlying conditions cannot be claimed automatically (different opinion Windisch-Graetz, 2003, p. 235). However, the scope of the necessary benefits in kind is indeed more extensive in the case of medium to serious medical disorders. But not until it has become necessary for medical reasons either to prevent aggravation of the disorder or to start immediate significant treatment of the underlying condition is the treatment of the underlying condition to be more extensive and extend over and above mere treatment of the symptoms. Medically necessitated costs of travel are borne by the institution providing 16 the benefits in kind in accordance with its legislation. If these are part of the benefits in kind of the State providing the benefits, they must be granted in compliance with Art. 19; as aids to benefits for medical or other treatment they can also be assigned pursuant to the definition of benefits in kind Art. (1)(va) Reg. No. 883/2004. The special provision of Art. 26 (8) of Reg. No. 987/2009 – to be borne solely in compliance with the legislation of the competent institution – cannot be applied (analogously) here. Because Art 26 Reg. No. 987/2009 applies exclusively to the case of targeted cross-border receipt of the health benefits in compliance with Art. 20 VO (EG) Nr. 883/2004 and not to Art. 19 Reg. No. 883/2004; Art. 19 often applies to emergencies in the State of the institution providing the benefits in kind. For this reason only the legislation of the institution providing the benefit in kind applies, i.e. the legislation in the Member State of stay. However, where costs of travel connected with further treatment in the competent State are concerned, these are part of the treatment in this State and normally ancillary costs of treatment to take place subsequently and as such must be assessed in compliance with the legislation of the competent State and not that of the State providing the treatment on behalf of the competent state. Art. 19 gives no criterion for a different assessment.

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3. Substantial benefits in kind Art. 19 (2)

Pursuant to the criteria of para. 14-15, the provision of complex treatments or substantial aids and appliances without limitation can also be taken into consideration, whereby Art. 19 (2) implies the same as did Art. 21 (2) Reg. No. 574/72. There is no indication in the new Reg. that changes this old legal position. There is no longer any authorisation procedure required for substantial benefits in kind such as that required in Art. 17 (7) Reg. No. 574/72. 18 However, Art. 19 (2) requires that the Administrative Commissions draws up a list of those benefits in kind that can only be provided if there is an appropriate prior agreement with the institution providing the care. Decision No. 196 of the Administrative Commission from 23.3.2004 mentioned only 2 treatments: kidney dialysis and oxygen therapy. Administrative Commission Decision No. 23 from 12.6.2009 (OJ. C 106 from 24.4.2010, s 40-41) now expands this under Point 3 and in the Annex. Pursuant to para. 2 substantial benefits in kind now include: kidney dialysis, oxygen therapy, special asthma treatment, echocardiography in case of chronic autoimmune diseases and chemotherapy. 19 In the case of such benefits in kind an “agreement” “should” be made between the insured person and the “institution providing the care”. The term “institution” here means the body or authority responsible for applying the legislation of the respective State pursuant to the general definition given in Art. 1 (p). The regulation and the list do not constitute an additional requirement for claiming benefits in kind, but, as the aim of the regulation clearly indicates, instead an obligation on the part of the institution of the place of stay to provide a specific aid; the list has more of a warning and regulatory function. For this reason the list with the treatments is “not exhaustive” (as expressly indicated in No. 2 of Decision No. 196 of the Administrative Commission from 23.3.2004 and now also in No.3 (2) of Decision S 3 from 12.6.2009 (OJ. C 106 from 24.4.2010, s. 40-41). 17

4. Procedure in compliance with Art. 25 (1-2) Reg. No. 987/2009 and practice 20

Proof of the entitlement to benefits in kind was formerly certified with the E 111 form and now with the EHIC (European Health Insurance Card). The insured person can go directly to the provider of the benefit with this card. The problem involved with proving entitlement to benefits via certifications such as the European Health Insurance Card is that (1) the national provider of the benefit is not obliged to acknowledge the international proof of entitlement and to treat insured persons from another Member State in the same way as its own insured persons (see Preamble to Art. 17 para. 33 et seq) and (2) the insured persons themselves often do not use such certification, but instead undergo private treatment which they pay in advance and then have their costs reimbursed by their competent institution, either via the fundamental regulations based on the

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freedom to provide services (see Preamble to Art. 17 para. 32) or via the “exceptional regulations” of coordination right (see below para. 26 et seq). After all many insured persons probably took out private foreign health insurance to cover medical costs for the length of their holidays. However, the EHIC is being used and accepted with increasing frequency. The Administrative Commission has enacted the following Decisions where the European Health Insurance Card is concerned. S 1 from 12.6.2009 (OJ. C 106 from 24.4.2010, s. 23-25) concerning the design and necessary contents as well as the use and legitimising effect of the card and S 2 from 12.6.2009 (OJ. C 106 from 24.4.2010, s. 26-39) concerning the technical specifications of the card. In compliance with No. 1 of Decision S 1, the explanatory content of the EHIC certifies the “entitlement of an insured person and a pensioner as well as the members of their family to benefits in kind which become necessary on medical grounds”. This is imprecise. The competent institution of the Member State of affiliation can only certify affiliation and entitlement according to its own legislation. However, the wording “entitlement … to benefits in kind which become necessary on medical grounds” sounds more like the formulation of the legal consequences of this affiliation in the case of a temporary stay in another Member State, i.e. entitlement arising from Art. 19 Reg. No. 883/2004. The explanatory power and its binding effect is then, however, correctly represented in the decisive No. 4 of this Decision: “The competent institution may not reject the refund of the cost of benefits on the grounds that the person has ceased to be insured with the institution which has issued the European Health Insurance Card”. Article 25 (1 and 2) Reg. No. 987/2009 also make this clear. For this reason Decision S 1 requires that the certification is adequately individualised and its period of validity clearly indicated. Provided any changes made during the period of validity do not revoke the EHIC or render it invalid, the EHIC has legal validity and the competent institution is bound by the EHIC in compliance with Art. 5 Reg. No. 987/2009 (cf. in more detail below Spiegel below Art. 76 para 23 et seq., para 26 et seq.). Art. 5 Reg. No. 987/2009 also defines a procedure in the case of disputes concerning the legal value of the EHIC as binding: the institution providing the benefit must contact the competent institution (see below Spiegel Art. 76 para 2 and 6 et seq.). Decision S 1 correctly states in recital No. 7 that the Member States should cooperate to put in place procedures that deal with a change in the State competent for the EHIC quickly and appropriately. Whether or not the new data sharing system and the new portable instruments (s. below Art. 78) will provide help here remains to be seen in practice. Only the insurance institutions of the Member State providing the benefit for a temporary stay are bound by the EHIC, not the actual providers of the benefits in kind, who do not have to recognise the EHIC. However, in compliance with Art. 76 (2-4) the cooperation obligation of the institutions of all Member States Karl-Jürgen Bieback

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22

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includes using their regulatory powers or their contracts with the providers of the benefits to ensure for their sector that EHIC can be used with the same effect as a certification of entitlement that they issued themselves. 25 Otherwise the institution providing the benefits decides on the basis of Administrative Commission Decision No. S 3 from 12.6.2009 (OJ. C 106 from 24.4.2010, s. 40-41) independently on the conditions for the entitlement to benefits in kind deriving from Art. 19, in particular whether a benefit is “necessary on medical grounds” (see paragraphs 10-15 above). Because they alone are the recipients of entitlements deriving from Art. 19. Any disputes between the insured person and the institution providing the benefit in kind are subject to the legislation of the institution providing the benefit in kind. 5. The insured person’s entitlement to reimbursement (Art. 25 (4)(5) Reg. No. 987/2009) 26

Art. 25 (4 to 7) Reg. No. 987/2009 provides for three different ways of reimbursing costs, in the event the insured person has himself/herself borne the costs in the place of stay: – Reimbursement by the institution of the place of stay according to its rates (Art. 25 (4) Reg. No. 987/2009), – Reimbursement by the competent institution according to the rates of the institution of the place of stay (Art. 25 (5) Reg. No. 987/2009), – Reimbursement by the competent institution according to its rates (Art. 25 (6 and 7) Reg. No. 987/2009).

These are entitlements created genuinely by EU legislation independently of national reimbursement legislation. This diverse system of cost reimbursement is firstly a reaction to the fact that the “regulatory system for the provision of benefits in kind on behalf of another Member State” does not work (Preamble to Art. 17 para- 34). 27 Whereby reimbursement by the institution of the place of stay to its rates takes priority. The insured person can, however, choose direct reimbursement by the competent institution to the rates and conditions of the place of stay instead of reimbursement by the institution of the place of stay, as Art. 25 (5) Reg. No. 987/2009 assumes only that the reimbursement has not been requested from the institution of the place of stay. If the competent institution and the insured person agree, they can choose direct reimbursement by the competent institution to its rates and conditions in compliance with Art. 25 (6) Reg. No. 987/2009. In compliance with Art. 25 (7) Reg. No. 987/2009 the insured person can even be forced to accept this kind of reimbursement if the institution of the place of stay does not provide for such reimbursement. 28 However, this diverse system of cost reimbursement is also necessary to ensure protection of the fundamental freedoms of free movement and the freedom to provide services. In the Case C-368/98 Vanbraekel) (EU:C:2001:400) an in-

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sured person from Belgium was unjustly refused authorisation for treatment in France in compliance with Art. 22 (1) (c) Reg. No. 1408/71. The insured person had paid the costs himself and subsequently asserted a claim for reimbursement. The question here was as to whether the (lower) costs under French legislation could be claimed or the (higher) costs under Belgian legislation. The CJEU correctly ruled that according to Art. 22 only the costs incurred in France, the Member State that provided the benefits in kind, could be reimbursed, but that Art. 22 was in fact only a minimum regulation and that national legislation could provide for a higher reimbursement. It deemed the restriction to the cost rates of the Member State of affiliation providing the benefits in kind as an encroachment on the freedom to provide services if the costs for treatment in the Member State of affiliation are reimbursed at a higher rate than in the Member State of treatment. This would mean that the reimbursement of costs in the case of the cross-border receipt of benefits in kind was given worse treatment than reimbursement of costs for the receipt of benefits in kind in the home State, i.e. in the Member State of the competent institution. Art. 56 TFEU therefore gives rise to an entitlement to reimbursement of the rates of the Member State of affiliation if these are higher than those of another Member States for the treatment. The possibility of the amount of reimbursement being higher than the costs actually paid (cf. criticism of Cabral, E.L.Rev. 2004, 673, 686) is now ruled out for coordinating social security law by Art. 25 (8) Reg. No. 987/2009 (and for Directive 2011/24/EU by Art. 7 (4), see above para. 12 et seq), so that reimbursement can never be higher than the amount of the actually incurred costs. Even if coordination legislation is to be measured on the basis of the freedom to provide services, according to the case law of the CJEU (see above para. 6 and Preamble to Art. 17 para. 10 et seq.) there is firstly no instance of use of freedom to provide services in the case of Art. 19. And secondly the restriction to those costs that the insured person actually had to pay is deemed proportionate (Preamble to Art. 17 para. 12). Even Art. 34 Reg. No. 574/72 provided for the competent institution applying 29 the rates of the institution of the place of stay for the costs incurred, if the procedure in compliance with Art. 21, 23 Reg. No. 574/72 could not be complied with. As this procedure was very complicated, the competent institution could also, in compliance with Art. 34 (4) of Reg. No. 574/72, make the reimbursement in compliance with its own applicable rates if the amount to be reimbursed did not exceed 1,000 Euros (Decision No. 176 of the Administrative Commission OJ. L 243 from 28.9.2000). According to Art. 34 (5) of Reg. No. 574/72 such reimbursement of the rates of the competent institution were also permissible against the will of the insured person if the legislation of the institution providing the benefit in kind did not provide for reimbursement rates. Finally it was also possible for the competent institution, in derogation from Art. 34 (4) Reg. No. 574/72, to reimburse the actual costs incurred by the insured person directly (Case C-193/03 (BKK Robert Bosch), EU:C:2004:630), in particular if the instiKarl-Jürgen Bieback

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tution of the place of stay refused a case pursuant to Art. 22 (1)(a) Reg. No. 1408/71 (now Art. 19) that the institution of the Member State of residence/the competent institution had approved with the issuance of the E-111 certificate (now the European Health Insurance Card) (Case C-326/00 (IKA), EU:C: 2003:101, para. 53 et seq., 61; the institution of the place of stay had assumed a case pursuant to Art. 22 (1)(c) Reg. No. 1408/71, now Art. 20 Reg. No. 883/2004). The legal basis for this entitlement that the CJEU based on coordination legislation remains unclear. With regard to the old legislation, Art. 25 (4) Reg. No. 987/2009 only adds one additional entitlement to reimbursement vis-àvis the institution of the place of stay. 30 All three kinds of entitlement to the reimbursement of costs assume a case subject to Art. 19 Reg. No. 883/2004, i.e. benefits in kind that became necessary on medical grounds in the Member State of temporary stay where the insured person had not travelled to the Member State providing the treatment for the sole purpose of claiming such benefits in kind (above para. 6 and para. 10 et seq.). a) Reimbursement by the institution of the place of stay according to its rates (Art. 25 (4) Reg. No. 987/2009) 31

The entitlement to reimbursement by the institution of the place of stay according to its rates (Art. 25 (4)) requires that the legislation of the place of stay provides for such a claim. If this is the case, the amount and procedure of the legislation of the place of stay also apply. b) Reimbursement by the competent institution according to the rates of the institution of the place of stay (Art. 25 (5) Reg. No. 987/2009)

32

There are no special requirements for reimbursement by the competent institution according to the rates of the place of stay (Art. 25 (5) Reg. No. 987/2009). There are, however, two possible alternatives with regard to the amount of the reimbursement: either according to the rates of the place of stay that must then be determined on the basis of information from the institution of the place of stay (§ 25 (5)(2) Reg. No. 987/2009), or according to the reimbursement rates in compliance with Art. 62 Reg. No. 987/2009, especially the lump sums calculated in compliance with Art. 62 (2) Reg. No. 987/2009 that in compliance with Art. 62 (3) Reg. No. 987/2009 may not be higher than the rates of the institution providing the benefit in kind. It is not mentioned who has the right to choose. However, everything points to these being administrative simplifications for the competent institution. According to p.2 only the competent institution has a right to request the information required for application of the second alternative from the institution of the place of stay. So should the insured person choose to claim reimbursement from the competent institution instead of from the institution providing the benefit in kind, he/she cannot prevent the competent institution from choosing one or other of the methods of calculation. Nevertheless, the dis236

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cretion of the competent institution might be restricted. It will reimburse the insured person for the (higher) costs of the Member State of stay if these costs were charged through no fault of its own in the State providing the benefit in kind. The institution providing the benefit in kind must inform the competent institution of the costs at the place of stay by means of a structured electronic instrument or by means of the old E-series forms (cf. Art. 78 (2) et seq.). c) Reimbursement by the competent institution according to its rates (Art. 25 (6 and 7) Reg. No. 987/2009)

In compliance with Art. 25 (6) Reg. No. 987/2009 there is also the possibility 33 of entitlement to reimbursement pursuant to the rates of the competent institution which falls within the competent institution’s authority to decide, albeit with the agreement of the insured person. As a rule this is the simplest alternative for both parties as it functions without any great redress to the legislation of the State of stay and prevents the insured person from being placed in a worse position than he/she would be in the case of an entitlement to reimbursement in his/her home Member State. This method of reimbursement is usually also appropriate in the event there is a failure in the scheme of the provision of the benefit in kind (whether caused through the “fault” of the insured person or not). This is the case, for example, if co-payments in the other Member State are higher than in the competent State. However, Art. 25 (8) Reg. No. 987/2009 also prescribes that no more than the amount the insured person had to pay in the other Member State is ever reimbursed. The competent institution must use its discretionary powers appropriately, especially to take into consideration the reasons why the benefits could not have been received in kind at the place of stay (cf. also Case C-56/01 (Inizan), EU:C:2003:578, para. 46). Should these derive from the behaviour of the institution at the place of stay providing the benefit in kind, then reimbursement must normally be granted should the insured person request it. Because the behaviour of the institution at the place of stay cannot be attributed to the insured person, but more likely to the competent institution. In the event the institution providing the benefit only provides for actual 34 benefits in kind but not for reimbursement, the competent institution can reimburse the costs in accordance with its legislation and rates without the agreement of the insured person (Art. 25 (7) Reg. No. 987/2009). 6. Disputes concerning entitlements between claims pursuant to Art. 19 on the one hand and 20 or 17 on the other

If the institution of the place of stay and the institution of the Member State of 35 residency are in doubt as to whether a case pursuant to Art. 19 (and Health Insurance Card) or a case pursuant to Art. 20 (and attestation by means of an E 112 form/now Document S2) is concerned, both sides must examine the relevant procedure and cooperate to reach an amicable agreement; the CJEU is of the opinion that the institution of the Member State of residency should not simply Karl-Jürgen Bieback

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accept the assessment of the institution of the Member State of stay if this does not comply with the previous behaviour and opinion of the institution of the Member State of residency (Case C-326/00 (IKA), EU:C:2003:101, para. 31 et seq.). Please see the Preamble to Art. 17 paragraph 5 et seq. and paragraph 18 for disputes concerning entitlements between claims pursuant to Art. 19 on the one hand and 20 or 17 on the other. The disputes here are often concerned with the authenticity of the different instruments submitted.

Article 20 Travel with the purpose of receiving benefits in kind – authorisation to receive appropriate treatment outside the Member State of residence (1) Unless otherwise provided for by this Regulation, an insured person travelling to another Member State with the purpose of receiving benefits in kind during the stay shall seek authorisation from the competent institution. (2) An insured person who is authorised by the competent institution to go to another Member State with the purpose of receiving the treatment appropriate to his/her condition shall receive the benefits in kind provided, on behalf of the competent institution, by the institution of the place of stay, in accordance with the provisions of the legislation it applies, as though he/she were insured under the said legislation. The authorisation shall be accorded where the treatment in question is among the benefits provided for by the legislation in the Member State where the person concerned resides and where he/she cannot be given such treatment within a time limit which is medically justifiable, taking into account his/her current state of health and the probable course of his/her illness. (3) Paragraphs 1 and 2 shall apply mutatis mutandis to the members of the family of an insured person. (4) If the members of the family of an insured person reside in a Member State other than the Member State in which the insured person resides, and this Member State has opted for reimbursement on the basis of fixed amounts, the cost of the benefits in kind referred to in paragraph 2 shall be borne by the institution of the place of residence of the members of the family. In this case, for the purposes of paragraph 1, the institution of the place of residence of the members of the family shall be considered to be the competent institution. Article 26 Reg. No. 987/2009 Scheduled treatment A. Authorisation procedure (1) For the purposes of the application of Article 20(1) of the basic Regulation, the insured person shall present a document issued by the competent institution to the institution of the place of stay. For the purposes of this Article, the competent institution shall mean the institution which bears the cost of the scheduled treatment; in the cases referred to in Article 20(4) and 27(5) of the basic Regulation, in which the benefits in kind provided in the Member State of residence are reimbursed on the basis of fixed amounts, the competent institution shall mean the institution of the place of residence. (2) If an insured person does not reside in the competent Member State, he shall request authorisation from the institution of the place of residence, which shall forward it to the competent institution without delay. In that event, the institution of the place of residence shall certify in a statement whether the conditions set out in the second sentence of Article 20(2) of the basic Regulation are met in the Member State of residence. The competent institution may refuse to grant the requested authorisation only if, in accordance with the assessment of the institution of the place of residence, the conditions set out in the second sentence of Article 20(2) of the basic Regulation are not met in the Member State of residence of the insured person, or if the same treatment can be provided in the competent Member State itself, within a time-limit which is medically

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Article 20 justifiable, taking into account the current state of health and the probable course of illness of the person concerned. The competent institution shall inform the institution of the place of residence of its decision. In the absence of a reply within the deadlines set by its national legislation, the authorisation shall be considered to have been granted by the competent institution. (3) If an insured person who does not reside in the competent Member State is in need of urgent vitally necessary treatment, and the authorisation cannot be refused in accordance with the second sentence of Article 20(2) of the basic Regulation, the authorisation shall be granted by the institution of the place of residence on behalf of the competent institution, which shall be immediately informed by the institution of the place of residence. The competent institution shall accept the findings and the treatment options of the doctors approved by the institution of the place of residence that issues the authorisation, concerning the need for urgent vitally necessary treatment. (4) At any time during the procedure granting the authorisation, the competent institution shall retain the right to have the insured person examined by a doctor of its own choice in the Member State of stay or residence. (5) The institution of the place of stay shall, without prejudice to any decision regarding authorisation, inform the competent institution if it appears medically appropriate to supplement the treatment covered by the existing authorisation. B. Meeting the cost of benefits in kind incurred by the insured person (6) Without prejudice to paragraph 7, Article 25(4) and (5) of the implementing Regulation shall apply mutatis mutandis. (7) If the insured person has actually borne all or part of the costs for the authorised medical treatment him or herself and the costs which the competent institution is obliged to reimburse to the institution of the place of stay or to the insured person according to paragraph 6 (actual cost) are lower than the costs which it would have had to assume for the same treatment in the competent Member State (notional cost), the competent institution shall reimburse, upon request, the cost of treatment incurred by the insured person up to the amount by which the notional cost exceeds the actual cost. The reimbursed sum may not, however, exceed the costs actually incurred by the insured person and may take account of the amount which the insured person would have had to pay if the treatment had been delivered in the competent Member State. C. Meeting the costs of travel and stay as part of scheduled treatment (8) Where the national legislation of the competent institution provides for the reimbursement of the costs of travel and stay which are inseparable from the treatment of the insured person, such costs for the person concerned and, if necessary, for a person who must accompany him/her, shall be assumed by this institution when an authorisation is granted in the case of treatment in another Member State. D. Family members (9) Paragraphs 1 to 8 shall apply mutatis mutandis to the members of the family of the insured persons.

I. Spirit and Purpose, Fundamental Structure and History of Origin . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Personal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Authorisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) First Condition: right to the benefit in kind in the Member State of residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Second Condition: medical necessity – specific benefit in kind cannot be provided in the Member State of residence in due time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Family members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Implication: provision of benefits in kind by the institutions of the place of residence or stay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Competence and binding effects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Procedures (Art. 26 Reg. No. 987/2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Cost reimbursement procedure in favour of the insured person. . . . . 8. Conflicts and competition with other benefits in kind . . . . . . . . . . . . . . .

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I. Spirit and Purpose, Fundamental Structure and History of Origin

Contrary to the basic regulation of Art. 17, Art. 19 and Art. 20 cover the provision of benefits in kind for insured persons and their members of the family who do not reside in another Member State but only stay temporarily in the other Member State (Art. 1(k)). For the differentiation between the two entitlements pursuant to Art. 19 on the one hand and Art. 20 on the other please see Art. 17 para. 5 et seq. and Art. 19 para. 5/6 above. Art. 19 applies to the case of a temporary stay in another Member State for purposes that have nothing to do with medical treatment (tourist, business traveller etc.). Art. 20 applies to the case of a temporary stay in another Member State with the express purpose of receiving medical treatment. The differentiation must be made individually according to the aims of the insured person based on objective criteria (see above Preamble to Art. 17 para. 14 et seq.and Art. 19 para. 5 et seq.). Art. 20 subjects the provision of the benefits in kind in another Member State to authorisation, to which there is an entitlement in compliance with the regulation; i.e. the competent institution has no discretionary powers. EC legislation has supplanted the existing special regulations for the receipt of benefits in kind in another Member State provided for under national legislation for these cases. 2 A cross-border right to health care benefits can also be asserted pursuant to Art. 56 TFEU and to Directive 2011/24/EU in addition to via Art. 20. Please see Preamble to Art. 17 para 10, 14 et seq. and 18 above for the differentiation. Basically benefits in kind pursuant to Art. 20 must be approved by the competent institution and are provided by the Member Stay of stay in compliance with its legislation on behalf of the competent institution, while as a rule benefits in kind pursuant to Directive 2011/24/EU require no authorisation and are provided completely in compliance with the legislation of the competent Member State. This has consequences for the reimbursement of costs in addition to the provision of the benefits in kind. 1

3

Binding prior authorisation Requirements and type of right to benefits in kind Access to benefits in kind

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Art. 56 TFEU and Directive 2011/24/EU Basically none; exception: scheduled benefits in kind (hospital, hi-tech benefits) Pursuant to the legislation of the Member State of affiliation

The same as for all persons in the Member State providing treatment

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Type of provision: benefit in kind/cost reimbursement/direct provision of treatment by the health service

Final meeting of additional payments/co-payments Quality and prices

Art. 20 Reg. No. Art. 56 TFEU and Directive 883/2004 2011/24/EU Type of provision purOnly cost reimbursement, maximum suant to the legislation the rates of the Member State of afof the Member State filiation only, but not more than the providing treatment actual costs paid in the Member State (with or without coproviding treatment payment); if authorisation is illegally refused, right to reimbursement of costs at the rates of the Member State providing treatment vis-àvis the Member State providing treatment or the Member State of affiliation Pursuant to the legisla- Pursuant to the legislation of the tion of the Member Member State of affiliation State providing treatment The same as for all persons in the Member State providing treatment

In accordance with Art. 20 (2) (1) benefits are provided basically on the basis 4 of the provision of benefits in kind on behalf of another Member State (Art. 17 para. 14 et seq.). However with the following peculiarities: the conditions in Art. 20 are significantly more restrictive than those in Articles 17 and 19, because Art. 20 paragraphs 1 and 2 make the right to benefits in kind dependent on prior (binding) authorisation by the competent institution. The procedure for verifying and controlling the right to benefits in kind in Art. 20 is also different from that applicable to Art. 17 (certification and registration) and Art. 19 (Health Insurance Card) in that it is regulated by a special verification system (Art. 26 (1) Reg. No. 987/2009 and S2 documentation). The provisions of Art. 20 and Art. 26 Reg. No. 987/2009 are made more com- 5 plicated than is the case with Art. 19, in that here the competent State, the State of residence and the State providing the treatment are not the same. This is the case if persons reside in a Member State other than the competent Member State and receive in this State of residence benefits under the principle of the provision of benefits in kind on behalf of another Member State but now in fact request the provision of these benefits in kind in a third Member State. As the costs ultimately fall due for payment by the competent institution via a chain of reimbursement claims (the institution providing the benefit vis-à-vis the institution of the State of residence and the institution of the State of residence vis-àvis the competent institution), the competent institution (as is usual also in this case) issues the authorisation in compliance with Art. 20 paragraph 1 and in compliance with Art. 20 paragraph 2 also subjects the claim to the legislation of the competent institution and not, as Art. 17 would lead one to presume, to the Karl-Jürgen Bieback

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legislation of the actually competent (but in this case not the one providing the benefit) institution of the Member State of residence. 6 The original version of the predecessor regulation Art. 22 (1)(c) and Art. 2 Reg. No. 1408/71 provided for a sick worker travelling to another Member State and receiving benefits in kind there if the health insurance institution had previously authorised the change. Such authorisation could not be refused if the treatment could not be provided in the State of residence. Pursuant to CJEU case law (Case C-117/77 (Pierik), EU:C:1978:72 and Case C-182/78 (Pierik II), EU:C: 1979:142) this provision left the competent institution no discretionary power. For this reason the authorisation for “effective” treatment in another Member State could only be refused on medical grounds; irrelevant of whether or not the benefit is included in the national catalogue of benefits. In order to prevent insured EU citizens from then requesting benefits in kind in the State with the highest medical standard (cf. explanatory memorandum of the Commission to Reg. No. 2793) Art. 22 (2) was amended by Reg. No. 2793 dated 17.9.1981 (OJ (EC) L 275 dated 29.9.1981, p. 1) in such a way that “the treatment in question is among the benefits provided for in the legislation of the Member State in whose territory the person concerned resides” and on the other hand the connection of the authorisation with purely medical requirements with the provision that the insured person “cannot be given such treatment within the time normally necessary for obtaining the treatment in question in the Member State of residence, taking account of his current state of health and the probable course of the disease.” 7 The first condition has been retained in Reg. No. 883/2004. Where the second condition is concerned, namely that the insured person “cannot be given such treatment within the time normally necessary for obtaining the treatment in question in the Member State of residence”, it has been maintained that this significantly restricts the freedom to provide services of the insured person without any objective justification (treated in more detail: Windisch-Graetz, 2003, p. 243 et seq.). In this respect Reg. No. 883/2004 provides a more welcome, more freedom of movement-friendly and more proportionate regulation that links authorisation solely to the objective medical criteria acknowledged by the CJEU and introduced in the 1981 reform and no longer to the “normal” time necessary for obtaining the treatment in the place of residence. This also means that the competent institution can no longer link its authorisation with the necessity of observing “waiting lists” (as an element of rationing). This takes a key instrument for controlling the demand for benefits in kind away from the individual Member States (however see below para 13 et seq). In addition the new Reg. No. 987/2009 expands the reimbursement of costs to include the alternative pursuant to Art. 26 (7) Reg. No. 987/2009, see below paragraphs 25 and 31 et seq. 8 Art. 20 is subordinate/subsidiary (“Unless otherwise provided for in this Regulation”). But, Reg. No. 883/2004 provides for no regulation with higher priority for cross-border receipt of health services. In its third paragraph Art. 27

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refers to Art. 20. However, its subsidiary ranking in conflict with Art. 19 is indicated in that in principle Art. 19 and not Art. 20 is to be applied in the case of persons with chronic illnesses travelling to other Member States for non-medical purposes, i.e. in the knowledge that they will need to receive health services in the State of temporary stay (above Preamble to Art. 17 para. 14 et seq. and paragraph 11 below). In the Case Inizan (Case C-56/01 (Inizan), EU:C:2003:578, para. 15 et seq.) 9 the CJEU held that the authorisation requirement in Art. 22 (1)(c) (now Art. 20 paragraphs 1 and 2) is compatible with the fundamental freedoms from Art. 56 and 57 TFEU(= Art. 49 and 50 EC Treaty). However, as a restriction in the freedom to provide services by the cross-border receipt of health services is concerned here, the requirement of prior authorisation is to be interpreted strictly. The CJEU has consistently assessed the rights deriving from Reg. No. 883/2004 in the light of the fundamental freedoms and in several of its latest judgements rightly deemed individual disadvantages in coordination legislation as objectively justifiable and proportionate consequences of an inherently expedient and tested system for solving the problems of healthcare in mobility processes (Case C-208/07 (von Chamier-Glisczinski), EU:C:2009:455, para. 85, 87; Case C-211/08 (Commission/Spain), EU.C:210:340, para. 50 et seq.; Case C-388/09 (da Silva Martins), EU:C:2011:439, para. 72 et seq.). II. Commentary 1. Personal scope

See Art. 17 para. 7 et seq. for the personal scope. There are slightly different 10 special rules for pensioners in Art. 27. “Stay” according to the definition in Art. 1 (k) is “the temporary residence”, cf. there Art. 1 para. 21. For members of the family pursuant to Art. 20 (3 and 4) see paragraph 19 below. In fact, workers in permanent need of medical services could also fall under 11 Art. 20 of the Regulation, if they go to a State other than their State of residence and there "automatically” claim benefits in kind. However, as such groups of persons enjoy complete freedom of movement like all other citizens of the EU, the Administrative Commission has, since decision No. 123 from 24.2.1984 (OJ (EC) C 203 from 2.8.1984, s. 13) expressly placed dialysis patients within the scope of Art. 22 (1)(a) of Reg. No. 1408/71, now Art. 19 Reg. No. 883/2004. Other chronic diseases needing long-term treatment, pregnancy and the continuous provision of substantial aids and appliances and complex treatments were added later (Decision of the Administrative Commission No. S3 from 12.6.2009 (OJ. C 106 from 24.4.2010, s. 40-41, No. 1-3; above Art. 19 para 14 and para 17 et seq.). In order to differentiate these cases from the benefits in kind derived from Art. 20 that require authorisation, it is necessary that the persons concerned do not travel to another Member State for the purpose of receiving medical treatment (Administrative Commission ibid. No. 2), but for general reasons (Art. 19 Karl-Jürgen Bieback

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para. 14). In order to guarantee the freedom of movement of the insured person, the institution of the place of stay decides on the applicability of Art. 19; a condition that is implied in Art. 19 (2) and which Art. 26 (3)(2) Reg. No. 987/2009 expressly established as a general principle. On the other hand, only the competent institution of the Member State of affiliation can issue the prior authorisation required where Art. 20 applies. The insured person bears the risk of contacting the wrong institution here. 2. Authorisation 12

As a rule authorisation means prior, not subsequent agreement. The wording of Art. 20 para.1 and para. 2 s.1 makes this clear (“who is authorised to go to another Member State”). a) First Condition: right to the benefit in kind in the Member State of residence

The first condition for a right to authorisation is that the benefit sought in the other Member State is among the benefits to which the insured person has a right in his/her Member State of residence. The Member State of residence can be the competent State or pursuant to Art. 17 the State providing the benefit in kind on behalf of the competent institution. This condition is appropriate as the level of social protection of the individual EU citizens depends on the social security scheme in which they are permanently integrated and to which they are affiliated and this level of protection should not be raised simply by procuring the benefits in kind in a different Member State (cf. above para. 3). Whereby the national scheme is free to list the benefits in a fixed, exhaustive catalogue or to state more generally the categories or types of treatments or treatment methods (Case C-173/09 (Elchinov), EU:C:2010:581, para. 56-62; also in part Case C-157/99 (Smits and Peerbooms), EU:C:2001:404, para. 87). 14 Whether or not a benefit is provided for under the national legislation of the Member State of residence must be determined according to the general principles of interpretation. The general principles of interpretation of the national law should also take into account the traditions and customs of the medical services in any specific country which usually form the context of all legal instruments. This includes the general quality of services and the normal period in which services have to be delivered, even waiting-periods. Taking the statement of the Court “it is for each Member State to decide which medical benefits are reimbursed by its own social security system“ (Case C-173/09 (Elchinov), EU:C: 2010:581, para. 59) seriously could mean accepting waiting periods and waiting lists if these are a usual, traditional means of distributing and rationing medical services. However the Court judging on waiting periods did not refer to the first condition but only to the second condition, “medical necessity”, which means a purely objective medical assessment not limited by any legal restrictions (Case C-372/04 (Watts), EU:C:2006:325, para 56 – 79 see Bieback ZESAR 2006, 241 and below para 16). In the Case Geraets-Smits and Peerbooms the Court inter13

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preted the condition also in an abstract and objective way: “if the treatment concerned is covered by the sickness insurance scheme of the Member State in which the patient is insured, which requires that the treatment be 'normal within the professional circles concerned',“ (Case C-157/99, Geraets-Smits and Peerbooms, EU:C:2001:404, para. 60). The Court (Case C-268/13 (Petru), EU:C: 2014:2271, para 33) holds that Art. 20 does not distinguish between the different reasons for which a particular treatment cannot be provided in due time, the second condition; and a service is not delivered in due time if the necessary quality of treatment is not guaranteed (cf. below para. 18). Thereby the Court constantly undervalues the first condition in relation to the second condition without ever clearly determining their relation. On the other hand the CJEU correctly refused the legal presumption to be 15 drawn from the fact that a benefit that is not (actually) provided in the competent Member State is also not among the benefits provided for by the legislation of this State (Case C-173/09 (Elchinov), EU:C:2010:581, para. 68-73). Whereby the closer specification of the right to the benefit can also be left up to the legislators, provided such specification is binding for all parties, in particular for the insured person. If the second condition (medical necessity) is also given, then the benefit in the Member State providing the treatment must be limited to the scope of the specification of the benefit made by the competent Member State, this benefit may also not be usual or even not provided for in the competent Member State (Case C-173/09 (Elchinov), EU:C:2010:581, para. 63 et seq., 67). It is sufficient that it can be assigned to the definition of the benefit made by the competent Member State whether this is one of the categories (treatment as an in-patient or an out-patient) or one of the types of treatment (surgery or radiation). b) Second Condition: medical necessity – specific benefit in kind cannot be provided in the Member State of residence in due time

The second condition requires that the insured person cannot be given the 16 treatment in his/her Member State of residence “within a time limit that is medically justifiable, taking into account his/her current state of health and the probable course of his/her illness”. Endurance of the usual or normal time necessary in the Member State of residence, i.e. the acceptance of waiting times, is not required. In other words the insured person always has a right to procure benefits in kind in another Member State on medical grounds in urgent cases, if the institution of the State of residence cannot provide the benefit without undue delay – according to medical points of view with regard to the individual case. Any potential deterioration must also be prevented, which can be rectified by follow-up treatment in the Member State of residence but only with a heightened risk or more pain or worse chances of success. Finally the same matters must be taken into consideration as for the assessment of “necessity” in Art. 19 (1) (see Art. 19 para 11 et seq.above). If the benefit is defined broadly, it is also necessary that Karl-Jürgen Bieback

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an equally effective treatment cannot be provided without undue delay (Case C-56/01 (Inizan), EU:C:2003:578, para. 45; Case C-173/09 (Elchinov), EU:C: 2010:581, para. 64). 17 In the Case Inizan (Case C-56/01 (Inizan), EU:C:2003:578) the CJEU expressly emphasised a freedom of movement-friendly interpretation of the authorisation requirement, denying any discretionary power in the application of the legislation and advocating strict adherence to the conditions and a restrictive interpretation of the reasons for refusing the authorisation (para. 41 et seq.). The sole basis is (ibid para 46): “In that connection, in order to determine whether treatment which is equally effective for the patient can be obtained without undue delay in the Member State of residence, the competent institution is required to have regard to all the circumstances of each specific case and to take due account not only of the patient's medical condition at the time when authorisation is sought and, where appropriate, of the degree of pain or the nature of the patient's disability which might, for example, make it impossible or extremely difficult for him to carry out a professional activity, but also of his medical history (see Case C-157/99 (Smits and Peerbooms), EU:C:2001:404 para. 104; Case C-385/99 (Müller-Fauré), EU:C:2003:270, para. 90).”(Also Case C-173/09 (Elchinov), EU:C:2010:581, para. 66). However, this always concerns individual medical circumstances of both the necessity of treatment and the possibility of treatment. 18 In the event of deficiencies (lack of supplies or failure to meet professional/ international standards), the Advocate General in the Case Petru (Case C-268/13, EU:C:2014:2271) wanted only to grant the right to authorisation (para. 25 et seq.) if (only) an occasional deficiency is concerned, but not for a “systemic deficiency” that “manifests structural, generalised and prolonged deficiency" (para 28 et seq.). This is not convincing. Firstly, it is difficult to differentiate between occasional and systemic deficiencies; the AG gives no clues here. Secondly, the passages quoted from other judgements only ever refer to “planning and rationalisation efforts” “to avoid the phenomena of hospital overcapacity, imbalance in the supply of hospital medical care and logistical and financial wastage” (para. 32 referring to Case C-385/99 (Müller-Fauré), EU:C:2003:270, para. 91 and Case C-372/04 (Watts), EU:C:2006:325, para. 71). Thirdly the AG totally ignores the fact that the CJEU has stressed that this restriction applies only if the institutions of the Member State of residence provide “adequate, identical or equivalent treatment” (Müller-Fauré para 91) or “identical or equally effective treatment” (Watts para 71). The Court did not even mention these arguments. It held “that a lack of medication and of medical supplies and infrastructure“ be it occasional or structural „can make it impossible for the same or equally effective treatment to be provided in good time in the Member State of residence“ (Case C-268/13 (Petru), EU:C:2014:2271, para 33; Bieback ZESAR 2015, 51). Neither can it be argued that Art. 20 (2)(2) requires that the benefit can even be provided, but only not provided within a justifiable time limit.

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Art. 20 (2)(2) cannot be applied at all if the benefit cannot be provided at all due to a lack of the necessary facilities. This argument overlooks the fact that what is to be provided is defined in the first condition of the right to authorisation: namely that the benefit must be provided for in the legislation of the Member State of residence if the insured person is to have a respective right. The exact intention of Art. 20(2) is to provide a solution in the event that there is a disparity in the (unlimited) right to benefits and (poor) benefit reality. 3. Family members

In accordance with Art. 20 (3) the members of the insured person’s family are 19 to be fully integrated in the coordinating framework of benefits in kind. As the benefits in kind for members of the family living separately from the worker can be generally reimbursed to the institution of the Member State of residence of the family members by the institution of the competent Member State on the basis of fixed amounts pursuant to Art. 18 (2) and 35 (2) and Art. 62 (2), Art. 63 et seq. Reg. No. 987/2009 (formers Art. 94 Reg. No. 574/72), the institution of the Member State of residence is also liable for the costs incurred in another Member State and not the competent institution of the Member State of affiliation, because the fixed amount it received is intended to cover all the costs of necessary treatment including treatment pursuant to Art. 20. This explains the special provisions of Art. 20 (4). In compliance with Art. 1 (i), (ii) it is in principle the legislation applied in the 20 State that grants the benefit that determines who is deemed a “member of the family”. In the case of the provision of benefits in kind by the Member State of residence or stay on behalf of another Member State, this granting of benefits is divided between the Member State of residence or stay and the competent Member State. For this reason the CJEU has decided: in as far as the requirement of the insurance obligation and the fundamental existence of a claim to benefits is concerned, the term member of the family is decided by the legislation of the “competent State” – i.e. the State where the insurance exists, normally the State of employment (Case C-451/93 (Delavant), EU:C:1995:176, para. 15 et seq.). Only for the determination of the type of benefit, modalities of the benefit and ancillary obligations etc. is the health insurance legislation of the Member State of residence providing the benefit decisive. cf. Windisch-Graetz, 2003, p. 184 et seq.; cf. also Art 17 para 7 et seq. and para 10 above. 4. Implication: provision of benefits in kind by the institutions of the place of residence or stay

Like Articles 17 and 19, Art. 20 also grants a right to the provision of benefits 21 in kind by the institution of the place of stay. The provision of benefits therefore complies with the model of providing benefits in kind on behalf of another Member State, see Art. 17 para. 14 et seq. Whereby the decision-making authority is divided: Karl-Jürgen Bieback

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–

22

The competent institution can define exactly the modalities of the benefits in kind to be provided by means of the prior authorisation; it will bind also the competent institution of the Member State of residence, in case treatment is not sought in der Member State of residence but in a third State (below para. 25). The S2 certification document expressly allows this. However, the restrictions in the prior authorisation must be based on the conditions, e.g. because exactly this medically necessary treatment cannot be provided within a justifiable time limit in the competent Member State or Member State of residence, while other but less effective or not specifically relevant treatment would be available in good time in the competent Member State or Member State of residence. The institution providing the benefit in kind determines the other special conditions of the benefit in kind as well as the necessary medical measures. So the framework prescribed by the competent institution can be exceeded in the case of emergencies and complications. The competent institution is bound by these decisions (Case C-145/03 (Keller), EU:C:2005:211, para. 43 et seq.), see in this respect para 27 et seq. below.

In principle additional benefits such as travel costs, accompanying person etc, depend on the legislation of the Member State providing the benefit as they fall under the modalities of the benefit. If they are part of the benefit in kind in the Member State providing the benefit, they are provided there and charged to the competent Member State. Art. 26 (8) Reg. No. 987/2009 includes an important exception or expansion here: “Where the national legislation of the competent institution provides for the reimbursement of the costs of travel and stay which are inseparable from the treatment of the insured person, such costs for the person concerned and, if necessary, for a person who must accompany him/her, shall be assumed by this institution when an authorisation is granted in the case of treatment in another Member State.” This provision only makes sense if the additional costs are not included in the legislation of the Member State providing the treatment. Coordinating legislation then refers to the national legislation and prevents the less favourable application of the necessary cross-border claim to healthcare services compared to the national claim (clearly indicated in Recital 17 Reg. No. 987/2009; different in part and still under the old legislation Case C-466/04 (Acereda Herrera), EU:C:2006:405, para. 27 bis 29). As Art. 26 (8) Reg. No. 987/2009 is intended to improve the position of the insured person, where the assumption of costs for these additional benefits in kind are concerned Art. 26 is no obstacle that the institution of the Member State of stay is providing these additional benefits even if they are not among the spectrum of benefits in kind in the legislation of the competent institution of the Member State of affiliation. Please see Art. 19 para 16 above for medically necessitated transport costs.

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5. Competence and binding effects

Art. 26 DVO (EG) 987/2009 includes a graduated regulation of competence for the granting of the prior authorisation. (1) The competent institution is always competent for the final granting of the authorisation. This institution also bears the costs of the treatment (Art. 26 (1)). This is only different if in the case of reimbursement based on fixed amounts, the competent institution has met its obligations with a payment of the fixed amount to the institution of the State of residence; this applies in particular for (co-insured) family members who reside in a different Member State, the Member State of residence, and now wish to claim a benefit in kind in a third Member State, the Member State providing the treatment, that they cannot receive in either the Member State of residence or the competent Member State (Art. 26 (2) (3) Reg. No. 987/2009). The cost risk then lies with the institution of the Member State of residence which, pursuant to Art. 20 (4)(2) also becomes the “competent institution” for the purposes of granting the authorisation. It is therefore correct that Art. 26 (1) (2) Reg. No. 987/2009 always determines the institution that (ultimately) bears the costs as the “competent institution”. (2) If an insured person does not reside in the competent Member State (and cost reimbursement based on fixed amounts has not been agreed), he/she shall, in compliance with Art. 26 (2) Reg. No. 987/2009, request authorisation for the cross-border receipt of healthcare services from the institution of the place of residence, which shall forward it to the competent institution without delay. However, the institution of the place of residence must – as indicated in Art. 26 (2) sentence 2 in conjunction with sentence 3 Reg. No. 987/2009 – certify whether the conditions of the requested cross-border benefits are met in the Member State of residence, i.e. whether the same benefits are among the benefits provided for in the Member State of residence and whether these cannot be provided in the Member State of residence within a justifiable time limit. This constitutes a competence to make a binding decision concerning the conditions in the Member State of residence (below para. 28). However, the final decision then still lies with the competent institution of the Member State of affiliation, who in particular can decide whether the benefit in kind cannot be provided in good time in its own Member State. Authorisation of the competent institution of the Member State of affiliation is deemed granted in the absence of a reply within the deadlines set by its national legislation (Art. 25 (2) (5) Reg. No. 987/2009). This requires that the national legislation of the competent institution provides for such a deadline. Ultimately the standards would have to be taken from the procedural legislation of the Union, which however provides for only a few exact deadlines of its own for the protection of the citizens with a right to claims: the two-month deadline in Art. 16 (3) and Art. 60(3) Reg. No. 987/2009. (3) Only in an emergency, where there is a need of urgent vitally necessary treatment, can the institution of the place of residence grant authorisation, if the Karl-Jürgen Bieback

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conditions pursuant to Art. 20 (2)(2) are otherwise given (Art. 26 (3)(1) Reg. No. 987/2009). Art. 26 (3)(2) Reg. No. 987/2009 again stresses the fact that the competent institution is bound by the decisions of the doctors commissioned by the institution of the place of residence. 28 The competent institution is competent for determining the insurance obligation and the fundamental right to benefits with the issuing of the E 112 form, now certification document S2. As the specific obligation to provide benefits in kind is always based on the legislation and actual conditions of the place of residence, the institution of the place of residence determines such with binding effect vis-à-vis the competent institution and the institution of the place of stay (Art. 26 (2) sentences 2 and 3 Reg. No. 987/2009). The competent institution is also bound in its authorisation by the medical findings submitted by the institution of the place of residence concerning the need for “urgent vitally necessary treatment” (Art. 26 (3)(2) Reg. No. 987/2009). This now applies in compliance with Art. 5 (1) Reg. No. 987/2009 and has once again been explicitly stressed by the CJEU for the medical findings and decisions in the Member State of stay linked with the forms E 111 and E 112 (Case C-145/03 (Keller), EU:C: 2005:211, para. 43 et seq.). Otherwise the freedom of movement is not ensured where the interest of the insured person is concerned (see above Art. 17 para 21 et seq.). 29 However, as high costs could be incurred by the competent institution and because this institution also has “primary responsibility” for the insured person, it retains the right, in accordance with Art. 26 (4) Reg. No. 987/2009, to have the insured person examined by a doctor of its own choice in the place of stay or residence. It then makes its decision based (only) on these findings. 30 The institution providing the benefit must accept the prior authorisation of the competent State or State of residence, including all limitations to specific modalities and procedures it includes, that define in more detail the benefit in accordance with the legislation of the competent State or State of residence. Only within this framework can it provide the benefit in kind in compliance with its own legislation. 6. Procedures (Art. 26 Reg. No. 987/2009) 31

The right to benefits is certified with the E 112 form, now certification document S2; the health insurance card is not applicable here. If an insured person does not reside in the competent Member State, he/she shall request authorisation from the institution of the place of residence, which shall forward it to the competent institution without delay (Art. 26 (2)(1) Reg. No. 987/2009), whereby it certifies the conditions of the authorisation with binding effect for the competent institution and the institution providing the benefit in the place of stay, – that the benefits in kind sought in the other Member State are among the benefits in kind to which the insured persons are entitled in their State of residence 250

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and that the insured persons cannot be given the treatment in their Member State of residence “within a time limit that is medically justifiable, taking into account his/her current state of health and the probable course of his/her illness”. 7. Cost reimbursement procedure in favour of the insured person

The CJEU has correctly ruled that an insured person cannot be refused the 32 right to reimbursement of costs even if he/she did not attempt to gain prior authorisation, provided the conditions of Art. 20 were in fact met (Case C-173/09 (Elchinov), EU:C:2010:581, para. 45-47). Because insisting on prior authorisation in such a case would constitute an infringement of the freedom to provide services, which would not be justified by the circumstances of the case as the competent State would not have incurred any additional costs. This applies more so in the event of an unfounded refusal of the authorisation (on the part of the competent institution or in exceptional cases on the part of the institution of the place of residence), but where the insured person nevertheless received the benefit in kind abroad (Case C-368/98 (Vanbraekel), EU:C:2001:400, para. 34, 53). After all the insured person can also bear the costs himself/herself if the principle of the provision of benefits in kind by the Member State of residence or stay does not function in the Member State where treatment is provided, whether this is due to the fact that the provider of the benefits on behalf of another Member State does not accept the legitimation documents etc., or due to the providers not offering treatment within the framework of their general insurance scheme but only being willing to provide treatment on a private basis. If the insured person bore the costs himself/herself for these reasons, i.e. if the 33 obligatory provision of benefits in kind by the institution of the place of stay in compliance with Art. 20 (2) was not effected in line with the procedures prescribed by Reg. No. 883/2004 and Reg. No. 987/2009 and so had to be paid for by the insured person himself/herself, the insured person can demand reimbursement of said costs directly. In this respect Art. 26 (6) refers to the analogue application of the cost reimbursement procedure of Art. 25 (4) and (5) of the implementing regulation (see above Art. 19 para 31 et seq.). Art. 20 therefore provides for the following reimbursement procedures: – Reimbursement by the institution of the place of stay according to its rates if this is provided for under the legislation of said institution (Art. 25 (4) Reg. No. 987/2009). – Reimbursement of the actual costs incurred by the competent institution according to the rates of the institution of the place of stay (Art. 25 (5) Reg. No. 987/2009 in conjunction with Art. 62 Reg. No. 883/2004). – Reimbursement by the competent institution according to its rates if the rates of the competent institution are higher than those of the place of residence or stay (Art. 26 (7) Reg. No. 987/2009).

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In all cases reimbursement is never higher than the actual costs incurred by the insured person (Case C-173/09 (Elchinov), EU:C:2010:581, para. 81), whereby co-payments made by the insured person in the Member State where treatment was provided can also be taken into consideration (Art. 26 (7)(2) Reg. No. 987/2009). However, this power of discretion normally becomes an obligation, because the freedom to provide services also offers an interpretation here that prohibits a less favourable application compared to the claim in the competent Member State. 8. Conflicts and competition with other benefits in kind 34

For competition with other benefits in kind please see above paragraphs 6 and 7 as well as the Overview to Art. 17 paragraphs 14 to 18.

Article 21 Cash benefits (1) An insured person and members of his/her family residing or staying in a Member State other than the competent Member State shall be entitled to cash benefits provided by the competent institution in accordance with the legislation it applies. By agreement between the competent institution and the institution of the place of residence or stay, such benefits may, however, be provided by the institution of the place of residence or stay at the expense of the competent institution in accordance with the legislation of the competent Member State. (2) The competent institution of a Member State whose legislation stipulates that the calculation of cash benefits shall be based on average income or on an average contribution basis shall determine such average income or average contribution basis exclusively by reference to the incomes confirmed as having been paid, or contribution bases applied, during the periods completed under the said legislation. (3) The competent institution of a Member State whose legislation provides that the calculation of cash benefits shall be based on standard income shall take into account exclusively the standard income or, where appropriate, the average of standard incomes for the periods completed under the said legislation. (4) Paragraphs 2 and 3 shall apply mutatis mutandis to cases where the legislation applied by the competent institution lays down a specific reference period which corresponds in the case in question either wholly or partly to the periods which the person concerned has completed under the legislation of one or more other Member States. Article 27 Reg. No. 987/2009 Cash benefits relating to incapacity for work or residence in a Member State other than the competent Member State A. Procedure to be followed by the insured person (1) If the legislation of the competent Member State requires that the insured person presents a certificate in order to be entitled to cash benefits relating to incapacity for work pursuant to Article 21(1) of the basic Regulation, the insured person shall ask the doctor of the Member State of residence who established his state of health to certify his incapacity for work and its probable duration. (2) The insured person shall send the certificate to the competent institution within the time limit laid down by the legislation of the competent Member State. (3) Where the doctors providing treatment in the Member State of residence do not issue certificates of incapacity for work, and where such certificates are required under the legislation of the competent Member State, the person concerned shall apply directly to the institution of the place of residence. That institution shall immediately arrange for a medical assessment of the person’s incapacity for work and for the certificate

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Article 21 referred to in paragraph 1 to be drawn up. 3he certificate shall be forwarded to the competent institution forthwith. (4) The forwarding of the document referred to in paragraphs 1, 2 and 3 shall not exempt the insured person from fulfilling the obligations provided for by the applicable legislation, in particular with regard to his employer. Where appropriate, the employer and/or the competent institution may call upon the employee to participate in activities designed to promote and assist his return to employment. B. Procedure to be followed by the institution of the Member State of residence (5) 5. At the request of the competent institution, the institution of the place of residence shall carry out any necessary administrative checks or medical examinations of the person concerned in accordance with the legislation applied by this latter institution. The report of the examining doctor concerning, in particular, the probable duration of the incapacity for work, shall be forwarded without delay by the institution of the place of residence to the competent institution. C. Procedure to be followed by the competent institution (6) The competent institution shall reserve the right to have the insured person examined by a doctor of its choice. (7) Without prejudice to the second sentence of Article 21(1) of the basic Regulation, the competent institution shall pay the cash benefits directly to the person concerned and shall, where necessary, inform the institution of the place of residence thereof. (8) For the purposes of the application of Article 21(1) of the basic Regulation, the particulars of the certificate of incapacity for work of an insured person drawn up in another Member State on the basis of the medical findings of the examining doctor or institution shall have the same legal value as a certificate drawn up in the competent Member State. (9) If the competent institution refuses the cash benefits, it shall notify its decision to the insured person and at the same time to the institution of the place of residence. D. Procedure in the event of a stay in Member State other than the competent Member State (10) Paragraphs 1 to 9 shall apply mutatis mutandis when the insured person stays in a Member State other than the competent Member State. Article 28 Reg. No. 987/2009 Long-term care benefits in cash in the event of stay or residence in Member State other than the competent Member State A. Procedure to be followed by the insured person (1) In order to be entitled to long-term care benefits in cash pursuant to Article 21(1) of the basic Regulation, the insured person shall apply to the competent institution. The competent institution shall, where necessary, inform the institution of the place of residence thereof. B. Procedure to be followed by the institution of the place of residence (2) At the request of the competent institution, the institution of the place of residence shall examine the condition of the insured person with respect to his need for long-term care. The competent institution shall give the institution of the place of residence all the information necessary for such an examination. C. Procedure to be followed by the competent institution (3) In order to determine the degree of need for long-term care, the competent institution shall have the right to have the insured person examined by a doctor or any other expert of its choice. (4) Article 27(7) of the implementing Regulation shall apply mutatis mutandis. D. Procedure in the event of a stay in Member State other than the competent Member State (5) Paragraphs 1 to 4 shall apply mutatis mutandis when the insured person stays in a Member State other than the competent Member State. E. Family members (6) Paragraphs 1 to 5 shall apply mutatis mutandis to the members of the family of the insured person.

I. Spirit and Purpose, Fundamental Structure and History of Origin . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Legislation applicable to cash benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. The provision of cash benefits by the Member State of stay or residence according to Art. 21 (1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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8 8 11 13 14 15 19

I. Spirit and Purpose, Fundamental Structure and History of Origin

Art. 21 and Art. 27 Reg. No. 987/2009 refer to the export of cash benefits of health insurance in the event the insured person resides or stays outside of the Member State of the competent institution. In accordance with the new fundamental division of the coordinating health insurance legislation of Reg. No. 883/2004 into provisions for benefits in kind in Articles 17 to 20 and provisions for the cash benefits to be exported in compliance with Art. 21, Art. 21 prescribes that the cash benefits are to be paid to the insured person in his/her Member State of residence or stay by the competent institution according to its legislation if the insured person resides or stays in a Member State other than the competent Member State. The procedure for determining incapacity for work in the event of residence or stay in a Member State other than the Member State of the competent institution is defined in detail in Art. 27 Reg. No. 987/2009. Art. 21 (1) corresponds to Art. 19 (1) and Art. 22 (1)(1)(ii) Reg. No. 1408/71; Art. 21 (2-4) corresponds to Art. 23 (1-3) Reg. No. 1408/71. 2 Please refer to Art. 17 para 4 et seq. for the difference between benefits in kind and cash benefits. The CJEU has rightly distinguished benefits in kind and cash benefits according to content and function rather than according to the form they take (Case 33/65 (Dekker), EU:C:1965:118; Case 61/65 (VaassenGöbbels), EU:C:1966:39; Case C-160/96 (Molenaar), EU:C:1998:84, para. 31; see Watson, p. 204). The counter term “benefits in kind” is defined accordingly in Art. 1 (va)(ii) final (“… intended to supply, make available, pay directly or reimburse the cost of medical care …”). Cash benefits are accorded no special definition in the Reg., but are the counterpart of the definition of “benefits in kind”. They are therefore separate from the purposes of treatment, the insured person can dispose of them as he/she likes and they are granted independently of whether and to what amount costs for care have been incurred; they mostly replace wages (Case C-160/96 (Molenaar), EU:C:1998:84, para. 31) or concern obligations to make payment such as a pensioner's contribution to health insurance. Benefits in kind refer to personal healthcare services as well as medicines and medical aids intended for treatment, even if the health insurance pays money for these as part of cost reimbursement or payment of costs (Case C-160/96 (Molenaar), EU:C:1998:84, para. 31; Case 61/65 (Vaassen-Goebbels), EU:C: 1966:39). If cash payments are intended for the procurement of a healthcare ser1

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vice, then these are also deemed a benefit in kind in compliance with the definition in Art. 1 (va)(ii) (Case 75/63 (Unger), EU:C1964:19). If the insured persons can dispose of the care allowance with complete freedom and its granting is not subject to whether expenses were actually incurred for the care and to what amount, the CJEU has rightly classified the care allowance as a cash benefit (in the case of sickness), so that it must also be exported pursuant to Art. 19 Reg. No. 1408/71 (now Art. 21) (Case C-160/96 (Molenaar), EU:C:1998:84). 3 Examples of cash benefits in the case of illness and care are: 1. Wage replacement benefits paid by the health insurance, sickness benefits; 2. Continued payment of wages by the employee in the case of sickness in compliance with the German Continued Remuneration Act pursuant to Art. 3 lit a) in conjunction with Art. 3 (2) (Case C-45/90 (Paletta I), EU:C: 1992:236 and Case C-206/96 (Paletta II), EU:C:1996:182); in this respect see Preamble to Art. 17 para 22 above; 3. Care allowance paid to the carer of an insured person in need of care (see above Preamble to Art. 17 para 23 et seq. and Art. 17 para 6); in this respect Case C-160/96 (Molenaar), EU:C:1998:84 reaffirmed in Case C-466/04 (Acereda Herrera), EU:C:2006:405, para. 29 et seq. 4. The contributions of the German statutory and private care funds to the old age pension insurance of the carer pursuant to § 44 of SGB XI in conjunction with the first sentence of § 3(a) and § 166(2) of SGB VI (Case C-502/01 and C-31/02 (Gaumain-Cerri and Barth), EU:C:2004:413). II. Commentary 1. Legislation applicable to cash benefits

The conditions of insurance law and the fundamental entitlement to benefits 4 are always determined by the legislation of the competent institution of the Member State of affiliation. As the competent institution pays and exports the cash benefits itself in compliance with Art. 21 (1), the modalities of the cash benefits are – in contrast to the provision of benefits in kind by the State of residence or stay – also determined by the legislation of the competent institution and not the legislation of the State of stay or residence. Art. 21 treats a person residing/staying in a Member State other than the competent Member State as if he/she resided in the competent State and is therefore only a special form of the dictate of equal treatment of the rule of equivalence in Art. 5 (b) Reg. No. 883/2004. So the competent institution calculates the cash benefit solely on the basis of the income required by its legislation. Where Dutch legislation is concerned Annex XI, Netherlands includes numerous equalisations of (pension) benefits with cash benefits in the case of sickness under No.1. The deadlines for the application and certification of incapacity for work, the 5 suspension and cancellation of the entitlement are determined exclusively by the legislation of the competent institution. Karl-Jürgen Bieback

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2. Material scope 6

The employer is deemed the competent institution for the purpose of the coordination law (Art. 1 (q)(iv)) in as far as the employer is obliged by national legislation to pay social security benefits such as continued payment of wages. Explained in more detail in the Overview to Art. 17, para. 22 above. Art. 21 also applies to cash benefits for care (see para. 2 and Art. 17 para. 6). Art. 28 Reg. No. 987/2009 broadly transfers to these benefits the procedures applicable to normal cash benefits in the case of sickness (Art. 27 Reg. No. 987/2009). 3. The provision of cash benefits by the Member State of stay or residence according to Art. 21 (1)(2)

7

Art. 21 (1)(2) provides for a special kind of provision of benefits in which – on the basis of an agreement - the institution of the place of residence pays the cash benefits on behalf of the competent institution of the Member State of affiliation. This means that the legal position of the insured person is not curtailed. Payment is made at the expense of the competent institution. 4. Establishment of the incapacity for work by doctors of the place of residence, Art. 27 Reg. No. 987/2009 a) Legal effect of the doctor’s certificate from the place of residence the same as that of a national certificate

8

In accordance with Art. 27 para. 1 and especially para. 8 of Reg. No. 987/2009 it is the doctors of the place of residence who examine the insured person and – if so required by the national legislation of the competent institution – issue the necessary certificate of incapacity for work. In compliance with the principle of equal treatment of facts (Art. 5 (b)) and with Art. 27 (8) Reg. No. 987/2009 this certificate has the same legal value as a certificate issued in the Member State of the competent institution. i.e. the binding effect or the presumption of conformity is determined in accordance with the national legislation of the competent institution – in complete compliance with the principles of the export of benefits legislation (para 4 above). This authority of the legislation of the Member State of the competent institution also applies to the time limits for forwarding the certificate to the competent institution (Art. 27 (2) Reg. No. 987/2009) and the other obligations vis-à-vis the competent institution and the employer (Art. 27 (4) Reg. No. 987/2009). This equal treatment of facts is indeed necessary, otherwise the worker concerned would have considerable problems with certification, because the incapacity for work is usually in the past if subsequent examinations are ordered by the competent institution or the institution of the place of stay and cannot be verified at a later date. This would greatly affect freedom of movement (Case 22/86 (Rindone), EU:C:1987:130; Case C-45/90 (Paletta I), EU:C:1992:236 and Case C-206/96 (Paletta II), EU:C: 1996:182). Recognition of the findings of doctors in another Member State is 256

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also a consequence of the issuing of forms for claiming cross-border benefits and their export (Case C-145/03 (Keller), EU:C:2005:211 para. 43 et seq. to the forms E 111 and E 112 and decisions in the Member State of stay in the case of benefits provided by the Member State of stay or residence). With the equal treatment of facts and the legal effect of the certificate in com- 9 pliance with the legislation of the competent institution Reg. No. 987/2009 falls (rightly) behind the CJEU. Because the CJEU assumed a general binding effect and did not pay sufficient attention to the integration of the certificate of incapacity for work in the respective national legislation and therefore ruled generally that the competent institution and the employer are bound by the examination of incapacity for work and the certificate of the incapacity for work of the institution of the place or stay or rather the doctors of the place of stay (Case 22/86 (Rindone), EU:C:1987:130; Case C-45/90 (Paletta I), EU:C:1992:236 and Case C-206/96 (Paletta II), EU:C:1996:182). There is now only a generally binding effect if the national legislation prescribes this. Criticism of the rulings of the CJEU was focussed not only on the binding ef- 10 fect but also and especially on the fact that the conditions for the benefits, which are determined by the legislation of the competent institution, can only be decided by this institution and that the decision concerning an incapacity for work requires a comparison of the capacity with the demands of the last professional activity, which, however, is not sufficiently known by either the foreign doctor or the foreign institution. Against this argument and in favour of the view of the CJEU and of the regulation is the fact that the competent institution being bound by the decision of a foreign institution concerning the conditions for the benefits as is found in health insurance law is also necessary in other areas in order to protect the freedom of movement of migrant workers and safeguard them against serious disadvantages. The CJEU also decided in this sense for the determination of occupational diseases and the incapacity for work within the framework of invalidity security (Case C-28/85 (Deghillage), EU:C:1986:113 as well as Case C-344/89 (Vidal), EU:C:1991:277). b) Is legal value undermined in the event of doubt or abuse?

Seen from the basic principle of protecting the freedom of movement of mi- 11 grant workers it is not expedient to accord the certificate of a Member State an entirely unrestricted binding effect (Case 130/88 (van de Bijl), EU:C:1989:349). The binding effect does not apply, for example, if and insofar as the certificate of the institution of the place of stay contains “obvious inaccuracies” that the competent institution can recognise from its own knowledge and that it can prove (Case 130/88 (van de Bijl), EU:C:1989:349 and AG, Commission and the German and Dutch governments in Case C-45/90 (Paletta I), EU:C:1992:236; not taken up by the CJEU in the same matter). The binding effect and legal relevance are now only determined in compliance with national legislation.

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However, in its second Paletta ruling the CJEU corrected its previous case law marginally in that it now allows the employer to provide proof that puts the national court in a position to determine that the employee registered incapacity for work in compliance with Art. 18 Reg. No. 574/72 in an improper or fraudulent manner. The employer bears the full burden of proof for the inaccuracy and abuse made of the certificate (Case C-45/90 (Paletta I), EU:C:1992:236 and Case C-206/96 (Paletta II), EU:C:1996:182, para. 26). This argument derives from the opinion of the CJEU that the medical certificate of incapacity for work of the place of residence has a binding effect; in the light of the regulation of Art. 27 (8) Reg. No. 987/2009 this no longer has any basis. c) Legal effect of the certificate also vis-à-vis the employer

13

The employer is deemed the competent institution for the purpose of the coordination law (Art. 1 (q)(iv)) in as far as the employer is obliged by national legislation to pay social security benefits such as continued payment of wages. The employer must therefore accept as binding the certificate of the foreign doctor and can also have the employee examined by a different doctor at the place of residence (Art. 27 (6) Reg. No. 987/2009). The Commission and the German and Dutch governments rightly stressed in the Case Paletta from 1991 and 1996 that the procedure of Art. 18 (Reg. No. 574/72 is not appropriate for cases of employer benefits (Case C-45/90 (Paletta I), EU:C:1992:236 and Case C-206/96 (Paletta II), EU:C:1996:182; also Resch, ZIAS 1998, 215). The employer is the “competent institution” here, but receives the notification of such only indirectly via its health insurance and does not have the same knowledge and means available as a national health insurance institution. The CJEU did not recognise this objection and left an improvement in the position of the employer up to a change in the national or Community legislation. This can be endorsed in the last analysis, because the precarious position of the employer in verifying an incapacity for work also exists in national legislation and is hardly surmountable. d) Examination by a doctor at the choice of the competent institution

14

The competent institution, whether the health insurance institution or the employer (see para 6), can have the person concerned examined by doctors via the competent institution (Art. 27 (5) Reg. No. 987/2009) or by a doctor of its choice at the place of residence (Art. 27 6) Reg. No. 987/2009). Or this can be undertaken by means of an examination in the Member State of the competent institution. As the CJEU ruled (Case C-344/89 (Vidal), EU:C:1991:277) with regard to the Art. 51 (1)(2) Reg. No. 574/72 whose wording is identical to that of Art. 27 (5) Reg. No. 987/2009, the codification of this right of the competent institution results in the receiver of the benefit being obliged to comply with the demand of the competent institution to undergo the examination in the competent Member State if the competent institution pays the travelling costs of the receiver of the benefit and if the journey is possible without any health risks. 258

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5. Calculation of the cash benefit

The calculation of the cash benefits is determined according to the legislation of the competent funding institution. If the reference value is to be based on income from previous periods of work in a specific reference period and if income was received in other Member States during this reference period, then the equality clause in Art. 5 demands that income in other Member States be treated as if it had been earned in the competent Member State. This can lead to quite complicated calculations, depending on whether the legislation of the competent institution takes gross or net income as the base or applies other calculations methods. For this reason paragraphs 2 to 4 include special regulations for the calculation of the cash benefit that simplify this calculation process. If the competent institution calculates the cash benefit on the basis of average income or on an average contribution, then only the income paid under the legislation of the competent institution is taken into account for the average (para 2). The same applies if a standard income is taken as the base (para 3). The provisions of paragraphs 1 and 2 also apply if the legislation applied by the competent institution provides for a reference period that also includes periods completed in other Member States. The amount of the income to be replaced is determined by the regulations of the competent funding institution. However, if income from different work periods in different States or the net income is taken as the reference value, then the respective amount is determined by the legislation under which the income was paid and the legislation of the State in which the net income might have to be taxed and social security contributions paid. This can lead to quite complicated calculations that are not clearly understood by the competent funding institution. For this reason Annex XI includes several special provisions. The fact that in order to determine the individual elements of the cash benefit foreign facts and events must be treated in the same way as national facts and events. This can have a very negative impact on migrant workers which is more a problem for EU legislation than one that concerns coordinating social security legislation. This in turn can infringe on Articles 18 and 20 TFEU and impede freedom of movement (Art. 45 TFEU). This is the case if, for example, net income is taken as the basis of sickness benefits and the tax rates and here also the members of the family play a role in determining such net income and if family members residing in another Member State are treated under tax legislation or administrative practice in a more inferior manner than those residing in the competent Member State (Case C-332/05 (Celozzi), EU:C:2007:35).

15

16

17

18

6. Procedure

Art. 27 (6 and 7) Reg. No. 987/2009 apply for the claiming of cash benefits 19 and the forms E 115-118 created for its execution were also applicable. For the

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20

21

22

23

most part these have now been replaced by the document and documents SOO1 et seq. The insured person must have his/her incapacity for work verified by means of a certificate to be issued by a doctor at the place of residence (Art. 27 (1) Reg. No. 987/2009), which he/she must then send to the competent institution within a time limit laid down by the legislation of the competent institution (Art. 27 (2) Reg. No. 987/2009). If there is no procedure at the place of residence for issuing certificates of incapacity for work, the insured person must apply directly to the institution of the place of residence which must then arrange for the required medical examination (Art. 27 (3) Reg. No. 987/2009). This in no way exempts the insured person from fulfilling other obligations required by the legislation of the respective Member State, in particular those vis-à-vis the employer (Art. 27 (4) Reg. No. 987/2009). In contrast to the earlier provisions of Art. 18 Reg. No. 574/72, Reg. No. 987/2009 now contains no time limits for the actions required of the insured person. These time limits are determined instead by the respective national legislation. However, these limits of national legislation must be defined and applied in such a way that they take into account the special situation of cross-border procedures and do not impede freedom of movement. The bilateral agreements concluded on the basis of Art. 18 (9) Reg. No. 574/72 (cf. now Annex I of Reg. No. 987/2009) do not apply to certificates of incapacity for work and their verification. If the institution of the place of residence or stay assumes the commissioning of doctors to issue the certificate (Art. 27 (3) Reg. No. 987/2009), then the insured person is not liable for any errors on the part of the institution of the place or residence or stay (Case 22/86 (Rindone), EU:C:1987:130 with reference to Case 302/81 (Eggers), EU:C:1982:336). See para 17 et seq. for verification of incapacity for work and also the certification of incapacity for work by the competent institution of the Member State of residence.

Article 22 Pension claimants (1) An insured person who, on making a claim for a pension, or during the investigation thereof, ceases to be entitled to benefits in kind under the legislation of the Member State last competent, shall remain entitled to benefits in kind under the legislation of the Member State in which he/she resides, provided that the pension claimant satisfies the insurance conditions of the legislation of the Member State referred to in paragraph 2. The right to benefits in kind in the Member State of residence shall also apply to the members of the family of the pension claimant. (2) The benefits in kind shall be chargeable to the institution of the Member State which, in the event of a pension being awarded, would become competent under Articles 23 to 25.

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Article 22 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Personal scope: Pension claimant and members of the family . . . . . . 2. Right to benefits in kind being provided on behalf of another institution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Loss of the entitlement to benefits in kind . . . . . . . . . . . . . . . . . . . . . . . . . b) A pension claimant’s entitlement to benefits in kind from the institution of at least one Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Obligation to bear the costs (para. 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 2 5 6 8 11 14

I. Spirit and Purpose

There can be a gap in insurance protection in the transitional period between 1 retirement and the former health insurance protection on the one hand and the verification of the old-age pension and the corresponding health insurance protection of the other. Art. 22 fills this gap in that paragraph 1 prescribes that the Member State of residence is competent for the provision of benefits in kind (on behalf of another Member State) for the person concerned and his/her family members for the time until the claim for an old-age pension is verified. The claimant must satisfy the insurance conditions for pensioners of the respective Member State competent for benefits in kind in compliance with the coordination provisions of Community legislation in Articles 23 and 25. Vis-à-vis the following provisions of the health insurance of the pensioner in Art. 23 et seq., Art. 22 includes an independent (provisional) conflict-of-law rule for the entitlement of a claim (Member State of residency) that would apply in the event of a pension being awarded. Liability for the costs is determined solely in accordance with the provisions of the health insurance of the pensioner in Art. 23 et seq. II. Commentary 1. Personal scope: Pension claimant and members of the family

Like all terms in the coordination legislation of the Regulation, the term sub- 2 mission of a claim must be defined independently of national legislation. Therefore the provision in Art. 50 plus the regulations in Art. 45 Reg. No. 987/2009 and the fictive effects in Art. 81 Reg. No. 883/2004, must be applied for the effective submission of a claim, even with an appropriate foreign institution. The decisive date for the commencement of the status as a claimant is the date the submitted claim is received by one of the competent pension insurance institutions (Art. 45 (1)(4)(5) Reg. No. 987/2009). The end date of the status as pension claimant must also be defined in accor- 3 dance with the coordination legislation: according to Art. 47 and 48 Reg. No. 987/2009 this is the date that final processing by the competent institution is completed. There is nothing that prevents the decision-making procedure including legal remedies if this maintains the procedure (cf. Art. 48 (1)(2) Reg. No. 987/2009). Karl-Jürgen Bieback

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The members of the family of pension claimants as well as the claimants themselves are entitled to the (provisional) award of benefits in kind by the institution of the Member State of residence, which it must provide on behalf of another Member State. See Art. 17 para 7 et seq. and 10 for the term members of the family and its definition. Art. 32 includes a conflict-of-law rule that must also be applied in the event there is a conflict between independent, not derivative rights or other rights to benefits in kind vis-à-vis the institution of the Member State of residence. 2. Right to benefits in kind being provided on behalf of another institution

5

Paragraph 1 regulates the right to the award (possibly on behalf of another institution) of benefits in kind by the institutions of the Member State of residence in particular for pension claimants in the event that the person concerned ceases to be entitled to benefits in kind under the legislation of the Member State last competent (in particular the last Member State of employment) during the time the pension claim is being investigated. a) Loss of the entitlement to benefits in kind

Alone the fact of the loss of the entitlement is taken as the basis here. The reason for the entitlement to benefits in kind to date and the reason for its loss are not specified in any detail; so no causality between the loss of entitlement and the submission of a pension claim is demanded. The reason for such loss could be that the present health insurance coverage ceases during the time the pension claim is being investigated and the last decisive legislation does not provide for the protection of pension claimants against the risk of illness and motherhood or that the insurance or territorial conditions required are not satisfied (in the case of residence abroad without an employment relationship). 7 This problem rarely arises for pension claimants residing in Member States that have a so-called national health system (Denmark, Great Britain, Ireland, Italy and – in part – Greece), because these persons also have a right to benefits in kind in such states after a minimum stay of normally six months. As a rule these Member States also remain competent for awarding benefits in kind in the event of continued entitlement. 6

b) A pension claimant’s entitlement to benefits in kind from the institution of at least one Member State 8

According to para 1 half sentence 2 entitlement to benefits in kind being awarded by the Member State of residence requires that the pension claimant has a legal right to benefits in kind under the legislation of at least one of the Member States, where applicable times in other Member States are taken into consideration pursuant to Art. 6 and regardless of the requirement of national residence. In this respect the provision is in principle most favourable. As a rule the legislation of the Member State is decisive in which the pension claim has 262

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been submitted and/or that would be eligible according to the conflict-of-rule legislation of Art. 33 et seq. in the event of the award of several pension claims in several countries (see in this respect the Preamble to Art. 23 para 8 and Commentary to Art. 23 and Art. 25 below). Any special conditions for health insurance in the State of the potentially competent pension insurance institution must be examined. Whereby according to Art. 5 and 6 foreign facts and events and insurance times must be treated equally with national ones. Art. 22 (1)(1) implies that there is in fact a health insurance for pensioners in the State in which the pension claim has been submitted. Insofar Art. 22 and Art. 23 et seq. contain only a territorial equal status or conflict-of-law rule; they do not create any independent insurance rights. The wording of the provision does not encompass an entitlement to benefits 9 in kind in the case of a temporary stay in a Member State other than the Member State primarily competent for the award of benefits in kind; however if the other conditions are satisfied Art. 27 with reference to Art. 19 can be applied accordingly. The material scope of the entitlement to benefits in kind from the institution 10 of the Member State of residence on behalf of another Member State is based on the general scheme of the provision of benefits in kind by the institutions of the place of residence or stay (see Art. 17 para 14 et seq.). 3. Procedure

See Art. 17 para 21 for the procedure. With the E 120/S1 form the competent 11 national pension insurance institution issues the claimant with a certification of the claim to be completed by the competent health insurance for submittance to the competent health insurance institution of the Member State of residence providing the benefit in kind. The claimant then receives a certificate from this body concerning the right to social security benefits for submission to the local provider of the benefit. In accordance with Art. 23 the general institution of the health insurance is competent in the event there are several institutions in the Member State of residence. If the claimant is not able to submit certification of entitlement to the compe- 12 tent institution of the State of stay or residence providing the benefit, the institution of the State of stay or residence shall officially request such certification from the competent institution. This body is notified of the registration by the institution of the place of stay or residence (see above Art. 17 para 20, 21). On obligation on the part of the national pension insurance institution to noti- 13 fy the competent national health insurance is to be assumed only if there is a specific reason for it to do so. 4. Obligation to bear the costs (para. 2)

Paragraph 2 places the obligation to reimburse the costs of the benefits in 14 kind awarded by the institution of the place of stay or residence with the instituKarl-Jürgen Bieback

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tion that would become competent under Art. 23 et seq. for the payment of the costs in the event of a pension being awarded. This is therefore a fictive competence for the time until the decision has been made to award the pension. Reimbursement between the institutions is effected in compliance with the general seq.provision of Art. 35 Reg. No. 883/2004. However, this fictive competence cannot replace the conditions required in Art. 22 (1): if the conditions of the health insurance of pensioners in the State that would be competent in compliance with Art. 23 et seq. are not satisfied, the institution of the health insurance of pensioners is not obliged to bear the costs. Neither is a pension award feigned. All that is feigned is a competence for the time until the final awarding of the pension independently of how the national legislation regulates competence.

Section 2 Pensioners and members of their families Overview Art. 23 et seq. comply for the most part (with some editorial changes) with the provisions of Art. 27-34 Reg. No. 1408/71. Substantively new rules are included in Art. 27 (2-5), Art. 28 (Special rules for retired frontier workers) and in Art. 30 (Contributions by pensioners). 2 Section 2 of the chapter “Sickness, maternity and equivalent paternity benefits” contains the coordination of insurance protection in the case of sickness and maternity for those receiving pensions (Art. 23-30) including the members of their families. The rules for pension claimants (Art. 22) has been assigned to Section 1 in the new Regulation. This concerns the coordination of protection in the case of sickness (insurance) for recipients of social benefits. Pursuant to Art. 31 these provisions are subsidiary vis-à-vis the coordination provisions for insured employees or self-employed persons. They do not apply to a pensioner or the members of his/her family who are entitled to benefits under the legislation of a Member State on the basis of activity as an employee or self-employed person. 3 The material scope of Art. 23 et seq. encompasses only sickness and maternity benefits (and long-term care benefits) granted by the competent institution of the country of residence of the pensioner after these risks have occurred. Art. 23-30 do not apply to allowances provided for by the legislation of a Member State which are designed to supplement old-age pensions by subsidising the contributions payable in respect of health insurance for the purpose of reducing their cost to the pensioner (judgment in Case C-103/75, Aulich, EU:C:1976:73). According to the Court, a distinction must be drawn between the contribution and the benefit. The first governs acquisition of the right. The second assumes 1

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that the right exists. Therefore, allowances, to the extent to which they represent a share in the contribution to health insurance, cannot constitute “benefits” from that insurance. Such allowances are to be treated as old-age cash benefits for the purposes of the Regulation (judgment in case C-73/99, Movrin, EU:C: 2000:369). Art. 23 et seq. have a heterogeneous aim. They coordinate the protection of 4 pensioners on the part of the Member States. They stipulate the debtor (competent) institutions for benefits, designate the institutions that must provide benefits on behalf of another Member Sate and include equivalence rules for offsetting disadvantages and they do all this under the overarching aim of the (most advantageous) protection of pensioners in the event of sickness, albeit only if such protection is provided for in the Member States in question or existed in the case of residence in the respective Member State. The content of these provisions follows the coordination techniques of the provision of benefits in kind on behalf of another Member State laid down in Art. 18 et seq. The coordination Regulation does not affect the guarantee of entitlement to 5 benefits in kind during a temporary or permanent stay in a Member State other than the Member State competent in compliance with conflict-of-law rules pursuant to the export principle (as is the case with cash benefits, Art. 7), but in such a way that the institutions of the State of stay or residence are involved in the provision of the benefits and are obliged to provide such at the expense of the competent institution (Art. 17, Art. 19, Art. 23). This gives rise to a secondary derived benefit relationship to the institution providing the benefit on behalf of another Member State that can be clearly differentiated from the primary insurance or benefit relationship. Conflict-of-law rules that determine the institutions competent for providing benefits can be derived indirectly from these provisions. The CJEU shared this view in its judgement in the Case Jordens-Vosters 6 (Case 69/79, EU:C:1980:7) in which it confirmed the power of the competent institution to provide a benefit in addition to or instead of the institution obliged to provide the benefit on behalf of another Member State for both Art. 19 Reg. No. 1408/71 and Art. 28(1) Reg. No. 1408/71. Furthermore, in its judgement in the Case Rundgren (Case C-389/99, EU:C:2001:264) the CJEU called up the principle from Reg. No. 1408/71, in particular its Art. 33, whereby a person entitled to a pension that is provided at the expense of an institution of another Member State may not be required to make any obligatory contributions to the coverage of benefits in accordance with the legislation of the State of residence. In other words a Member State of residence is not allowed call upon a pensioner to pay social security contributions or similar deductions if the person concerned receives benefits of a similar kind paid for by the Member State competent for the payment of the pension. This conflict-of-laws approach was again confirmed by the CJEU in the Case C-50/05 (Nikula), EU:C:2006:493, s. also CJEU, Case C-345/09 (van Delft), EU:C:2010:610, whereby the connection between the fiRolf Schuler

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nal obligation to bear the costs plus the right to demand contributions and the exclusiveness of such regulation competence typical for conflict-of-law rules is once again emphasised. 7 The legislature also shares this view, in that it concedes a pensioner, who resides in another State (as the State under whose legislation he/she receives a pension), the right to be released from the application of the legislation of the State of residence, provided he/she is not subject to its legislation due to an activity as an employed or self-employed person. 8 With regard to the protection of pensioners in the event of sickness (and maternity) the following (unwritten) conflict-of-law rules can therefore be formulated: a) In the case of a pensioner who receives only one pension and who resides in the Member State under whose legislation the pension is granted, the health insurance legislation of this State is applicable. b) For such a pensioner without any primary right to sickness benefits in the Member State of residence, the law pertaining to the pensions benefit is applicable (arg.: Art. 24 (1)(2)(a)(b)). c) However, if he/she has a primary right to sickness benefits in the Member State of residence, under whose legislation the right to benefits (in kind) is not subject to conditions of insurance or employment (and under whose legislation no pension is owed), the law pertaining to the pension benefit is applicable (arg.: Art. 25). d) In the case of a person receiving more than one pension where the place of residence is the same as the law pertaining to the pension benefit and the entitlement to health insurance, the legislation of the State of residence is applicable (arg.: Art. 23). e) In the case of a person receiving more than one pension but with no primary right to sickness benefits the legislation of the State of residence is applicable. f) The law pertaining to health insurance benefits applies if the entitlement exists solely under the legislation of a single Member State (arg.: Art. 24(2) (a)). g) A graduated sequence of competence applies in the case of an entitlement under the legislation of more than one Member State: (1) the legislation of the State to which the person concerned was subject for the longest period of time (2) the legislation to which the person entitled to a pension was last subject (Art. 24 (2)(b). h) For a person receiving more than one pension with a primary right to sickness benefits in the Member State of residence, under whose legislation the right to benefits (in kind) is not subject to conditions of insurance or employment (and under whose legislation no pension is owed), the law pertaining to the pension benefit is applicable according to (e) (arg.: Art. 25 in conjunction with Art. 2(2)).

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The regulations discussed above indicate that their intention is to maintain 9 Europe-wide health protection, even if such protection only exists in a single Member State. By linking the competence for the provision of pensions with the obligation to bear the costs for benefits in kinds the Court infers that the decisive element is in fact the actual receipt of a pension and not simply the potential entitlement of the person concerned (CJEU, Case C-389/99 (Rundgren), EU:C: 2001:264). Based on this case law the application requirement for the receipt of pensions leaves claimants a certain room for manoeuvre. The provisions laid down in Section 2 do not fall directly under the coordina- 10 tion task of Art. 48 TFEU, because this refers to the freedom of movement of workers. There are however consequences. In accordance with Art. 45 (3)(d) TFEU at the end of their working lives migrant workers and migrant self-employed persons have a right of stay plus rights deriving from Union citizenship in accordance with Art. 21 TFEU or rather Directive 2004/38 EC, provided they fulfil the conditions laid down therein.

Article 23 Right to benefits in kind under the legislation of the Member State of residence A person who receives a pension or pensions under the legislation of two or more Member States, of which one is the Member State of residence, and who is entitled to benefits in kind under the legislation of that Member State, shall, with the members of his/her family, receive such benefits in kind from and at the expense of the institution of the place of residence, as though he/she were a pensioner whose pension was payable solely under the legislation of that Member State.

I. Spirit and Purpose

Art. 23 corresponds substantially with former Art. 27 Reg. No. 1408/71. The 1 provision stipulates the State of residence as the primary decisive element under the conflict-of-law rules for persons with pensions from more than one Member State and the members of their families and the competent institutions of that State as primarily competent for the benefit and the bearing of its costs, provided an entitlement to sickness and maternity benefits is (also) provided for under its legislation. Under the conditions laid down in Art. 23 moving of the place of residence to another Member State therefore entails a change in the national insurance system against sickness, maternity and care. Art. 24 only applies in the event such an entitlement is not provided for and cannot be faked. II. Commentary

The regulation constitutes a conflict-of-law rule. Where sickness and materni- 2 ty benefits are concerned it regulates the sole and final, i.e. primary competence Rolf Schuler

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of the institution of the State of residence for persons receiving more than one (partial) pension and also the application of the prevailing legislation for these under the following conditions: The pensioner must actually receive a pension (also) in accordance with the pension law of the State of residence, so an entitlement in itself is not sufficient (CJEU, Case C-389/99 (Rundgren), EU:C: 2001:264), the amount of the pension is of no relevance here. Deferment of a pension claim in accordance with Art. 50 and therefore also the receipt of the pension is however permissible and is relevant in this connection. As long as the respective pension law provides a legal basis in this respect, this does not constitute an abuse of the law. 3 The other (partial) pensions from other Member States are irrelevant for the question of competence under conflict-of-law rules. The competence of the institution of the State of residence is comprehensive and applies to both cash benefits (Art. 29) and contribution legislation (Art. 30). 4 As long-term care benefits are allocated to sickness benefits, the regulation of competence under conflict-of-law rules is effected in accordance with the principles discussed above. This could lead to the person concerned having paid contributions into a long-term care insurance for many years and then receiving no or only rudimentary benefits if he/she moves his/her place of residence to another Member State in which long-term care benefits are not provided for (or only modestly). In a case concerning a pensioner’s loss of entitlement to German care allowance due to his moving his place of residence to his home State of Portugal the CJEU in its judgment from 30.06.2011 qualified the classification of longterm care benefits and interpreted Art. 27 of Reg. No. 1408/71 in such a way that (in the case of voluntary affiliation to the German long-term care insurance) an entitlement to sickness benefits in the strict sense in the Member State of residence does not lead to the loss of entitlement to German care allowance. The national care allowance must therefore be exported independently of the competence for sickness and maternity benefits under conflict-of-law rules. In other words long-term care insurance is no longer allocated to the health insurance of the pensioner, but treated under conflict-of-law rules as an independent insurance scheme and where benefits are concerned coordinated separately. If there is also an right to cash benefits for long-term care in the Member State of residence, the care allowance to be exported is reduced by the difference in the amount of the two benefits (CJEU, Case C-388/09 (da Silva Martins), EU:C: 2011:439).The legislation of the State of residence is responsible for the conditions to which the insurance and benefits are subject (s. also CJEU, Case 35/73 (Kunz), EU:C:1973:103). Whereby where applicable the general coordination provisions concerning the aggregation of periods of insurance, employment and residence pursuant to Art. 6 and the assimilation of facts pursuant to Art. 5 must also be applied.

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Article 24 Right to benefits in kind under the legislation of the Member State of residence 1.

2.

A person who receives a pension or pensions under the legislation of one or more Member States and who is not entitled to benefits in kind under the legislation of the Member State of residence shall nevertheless receive such benefits for himself/ herself and the members of his/her family, insofar as he/she would be entitled thereto under the legislation of the Member State or of at least one of the Member States competent in respect of his/her pensions, if he/she resided in that Member State. The benefits in kind shall be provided at the expense of the institution referred to in paragraph 2 by the institution of the place of residence, as though the person concerned were entitled to a pension and benefits in kind under the legislation of that Member State In the cases covered by paragraph 1, the cost of benefits in kind shall be borne by the institution as determined in accordance with the following rules: (a) where the pensioner is entitled to benefits in kind under the legislation of a single Member State, the cost shall be borne by the competent institution of that Member State; (b) where the pensioner is entitled to benefits in kind under the legislation of two or more Member States, the cost thereof shall be borne by the competent institution of the Member State to whose legislation the person has been subject for the longest period of time; should the application of this rule result in several institutions being responsible for the cost of benefits, the cost shall be borne by the institution applying the legislation to which the pensioner was last subject. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Conflict-of-law rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Provision of benefits in the State of residence (para. 1(2)) . . . . . . . . . . 3. Obligation to bear the costs (para. 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 3 3 4 8 10

I. Spirit and Purpose

Art. 24 concerns the group pensioners who have no entitlement to sickness or 1 maternity benefits under the legislation of the Member State of residence, but who however would be entitled to such under the legislation of one or more Member States under whose legislation they receive a pension if they resided there. Art. 24 replaces Art. 28 Reg. No. 1408/71. The provision was simply editori- 2 ally revised, cash benefits are regulated together in Art. 29. Pursuant to Art. 22 Reg. No. 3 pensioners with no entitlement to pension benefits under the legislation of the State of residence were only entitled to benefits in kind if, among other things, the legislation of the State of residence also provided for the granting of benefits in kind to pensioners (cf. CJEU, Case 35/73 (Kunz), EU:C: 1973:103). This requirement was subsequently waived taking into consideration

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the principle of most favourable treatment and in the interests of ensuring comprehensive protection of pensioners. II. Commentary 1. Conflict-of-law rules 3

The regulation of the provision of benefits in kind on behalf of another Member State laid down in para. 1(2) and stipulation of the primary (final) competent institution in para. 2 also indirectly determine the legislation to be applied. a) In the case of a pensioner who receives only one pension and who has no primary right to sickness benefits in the Member State of residence, the legislation of the Member State under whose legislation the pension is paid is applicable in the case of sickness and maternity (Statute of the pension benefit Art. 24(2)(a)). b) The following applies in the case of persons receiving more than one pension but with no primary entitlement to sickness benefits under the legislation of the State of residence: – the statute of entitlement of his/her health insurance applies if the right to sickness benefits exists solely under the legislation of a single Member State (para. (2) (a)), – in the case of entitlement under the legislation of more than one Member States the legislation of the State the following graduated sequence applies (1) the legislation of the State to which the person concerned was subject for the longest period of time (2) the legislation to which the person entitled to a pension was last subject (para. (2)(b)). c) For persons receiving more than one pension who have a primary right to sickness benefits in the Member State of residence, under whose legislation the right to benefits (in kind) is not subject to conditions of insurance or employment (and under whose legislation no pension is owed), the statute of the pension benefit is also applicable according to (b) (Art. 28(a) in conjunction with Art. 28(2)). 2. Provision of benefits in the State of residence (para. 1(2))

In the case of a pensioner who is not (legally) insured against sickness or maternity or who has no (primary) right to such, this provision prescribes that there is nevertheless a right to receive benefits from the competent institution of the State of residence, provided the pensioner is entitled to such benefits under the legislation of at least one other Member State (in the case of an assumed national residence and where applicable taking periods into account completed in another Member State). 5 The institution of the State of residence acts in this case on behalf of another Member State in accordance with para. 1(2). In other words the general principles of the provision of benefits in kind on behalf of another Member State are 4

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also applicable (cf. in this respect Art. 17 and Art. 19 and their respective commentaries). In particular benefits in kind are provided under the legislation of the State of residence at the expense of the institution competent primarily for providing the benefits and for bearing the costs of such. A person receiving a pension under the legislation of a Member State other 6 than his/her State of residence and who does not fulfil the conditions of the national health insurance, can therefore receive benefits in kind (provided on behalf of another Member State) from the competent national institution competent for health insurance, provided he/she is entitled to such benefits under the legislation of another Member State, where applicable with an assumed stay in said State. The pensioner derives no other rights or rights vis-à-vis the national institutions competent for health insurance here, in particular no (full) affiliation to the national health insurance scheme. However, para. 1 does not prevent the institution competent primarily for the 7 benefits from providing benefits for a pensioner residing in another Member State (CJEU, Case 69/79 (Jordens-Vosters), EU:C:1980:7). The institution competent under conflict-of-law rules is also obliged to provide benefits if a pensioner residing in another Member State and staying temporarily in its territory claims medical care benefits. 3. Obligation to bear the costs (para. 2) 8 The following sequence applies for the final obligation to bear the costs: a) In the case of a right to benefits in kind under the legislation of a single Member State, the competent institution of this State bears the costs. b) In the case of more than one right, the competent institution of the Member State to whose legislation the pensioner was subject for the longest period of time bears primary liability for the costs. c) If this gives rise to several institutions being competent, the competent institution of the Member State to whose legislation the pensioner was last subject bears the liability for the costs. d) The “legislation” to which the pensioner “was subject for the longest period of time”, referred to in Art. 24(2) is that relating to pensions. Therefore, where a person is entitled to draw pensions in accordance with the legislation of more than one Member State and he/she resides in another Member State in which he/she has no right to benefits in kind, the liability for payment of those benefits falls on the Member State with jurisdiction in respect of pensions and to whose legislation that person was subject for the longest period of time (judgement in Case C-321/12 (van der Helder), EU:C: 2013:648).

The scope of the obligation of remuneration vis-à-vis the institution providing 9 the benefit on behalf of another Member State is regulated in Art. 34 in conjunction with Art. 62 et seq. Implementing Reg. No. 987/2009.

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4. Procedure 10

Art. 22 et seq. of Implementing Reg. No. 987/2009 is applicable for the procedure concerning the granting of claims for benefits in kind provided on behalf of another Member State (cf. Art. 17 para. 20 et seq.).

Article 25 Pensions under the legislation of one or more Member States other than the Member State of residence, where there is a right to benefits in kind in the latter Member State Where the person receiving a pension or pensions under the legislation of one or more Member States resides in a Member State under whose legislation the right to receive benefits in kind is not subject to conditions of insurance, or of activity as an employed or self-employed person, and no pension is received from that Member State, the cost of benefits in kind provided to him/her and to members of his/her family shall be borne by the institution of one of the Member States competent in respect of his/her pensions determined in accordance with Article 24(2), to the extent that the pensioner and the members of his/her family would be entitled to such benefits if they resided in that Member State.

Editorially revised Art. 25 replaces Art. 28(a) Reg. No. 1408/71. This provision concerns a special rule for persons receiving pensions in different Member States that have health and maternity insurance schemes and where the granting of benefits in kind to persons residing there is not subject to conditions of insurance or employment. 2 This provision aims at preventing an excessive financial burden of Member States with a national health service. This aim is achieved by assigning the responsibility primarily to those Member States the law of which provides for the pension. Member States of this kind are Denmark, the UK, Ireland, Italy and Greece. 3 The provision of benefits in kind through the institution of the member State of Residence is effected as follows: a) In this Member State claims to benefits in kind are not conditional upon insurance or employment periods. Protection against sickness is intended only for these (mostly) non-contributory social security schemes. b) The pensioner does not draw a pension from the pension system of the Member State of residence. Protection shall be secured only for pensioners receiving the pensions from another Member State. Otherwise Art. 27 is applicable. The concept of pension (in the State of residence) refers both to pensions the entitlement to which is conditional on residence and to pensions which are employment-related. c) The aforementioned Regulation requires that the pensioner is entitled to the provision of benefits in kind according to the law of at least one Member State, where applicable with the assumption of a fictitious residence in this 1

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Member State. This is an essential requirement for connection to the law which accords the pension and the shifting of the cost burden. The order of the cost-bearing institutions is laid down in Art. 24(2).

Article 26 Residence of members of the family in a Member State other than the one in which the pensioner resides Members of the family of a person receiving a pension or pensions under the legislation of one or more Member States who reside in a Member State other than the one in which the pensioner resides shall be entitled to receive benefits in kind from the institution of the place of their residence in accordance with the provisions of the legislation it applies, insofar as the pensioner is entitled to benefits in kind under the legislation of a Member State. The costs shall be borne by the competent institution responsible for the costs of the benefits in kind provided to the pensioner in his/her Member State of residence.

Art. 26 corresponds in substance to Art. 29(1) Reg. No. 1408/71, the para. 2 1 of which was dropped. See Art. 29 for cash benefits. This provision guarantees the entitlement of family members of the pensioner who reside in a different Member State than the pensioner, in compliance with the general principles of coordination of the provision of benefits in kind on behalf of another Member State in the case of residence in a Member State other than that with primary competence. Reference is made in this respect to the Commentary to Art. 17. In particular the legislation applicable for the institution providing the benefits on behalf of another Member State is responsible for the type and scope of the provision of benefits in kind for family members in both cases. The provision contains no divergent connections or competences under con- 2 flict-of-law rules, not even any based on the fictive residence of the pensioner. Accordingly the competent institution of the pensioner’s State of residence or the competent institution in compliance with Art. 23, 24(2) is liable for bearing the costs of the benefits in kind provided on behalf of another Member State.

Article 27 Stay of the pensioner or the members of his/her family in a Member State other than the Member State in which they reside – Stay in the competent Member State – Authorisation for appropriate treatment outside the Member State of residence 1.

Article 19 shall apply mutatis mutandis to a person receiving a pension or pensions under the legislation of one or more Member States and entitled to benefits in kind under the legislation of one of the Member States which provide his/her pension(s) or to the members of his/her family who are staying in a Member State other than the one in which they reside.

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3.

4.

5.

Article 18(1) shall apply mutatis mutandis to the persons described in paragraph 1 when they stay in the Member State in which is situated the competent institution responsible for the cost of the benefits in kind provided to the pensioner in his/her Member State of residence and the said Member State has opted for this and is listed in Annex IV. Article 20 shall apply mutatis mutandis to a pensioner and/or the members of his/her family who are staying in a Member State other than the one in which they reside with the purpose of receiving there the treatment appropriate to their condition. Unless otherwise provided for by paragraph 5, the cost of the benefits in kind referred to in paragraphs 1 to 3 shall be borne by the competent institution responsible for the cost of benefits in kind provided to the pensioner in his/her Member State of residence. The cost of the benefits in kind referred to in paragraph 3 shall be borne by the institution of the place of residence of the pensioner or of the members of his/her family, if these persons reside in a Member State which has opted for reimbursement on the basis of fixed amounts. In these cases, for the purposes of paragraph 3, the institution of the place of residence of the pensioner or of the members of his/her family shall be considered to be the competent institution. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Granting of benefits in kind in Member States other than the State of residence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Benefits in kind from the competent Member State other than the State of residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Cross-border claims to benefits in kind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Cost burden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 2 5 7 8

I. Spirit and Purpose 1

Art. 27 corresponds in substance to Art. 31 Reg. No. 1408/71 and regulates the entitlement of a pensioner and his/her family members in the case of a temporary stay in a Member State other than their Member State of residence in compliance with the general regulations in Art. 19. Para. 2 prescribes the corresponding application of Art. 18(1) (stay outside of the Member State of residence in which the competent institution is situated). Para. 3 determines the corresponding application of Art. 20 for residence in another Member State with the purpose of receiving medical care in said State. With only few modifications, Art. 27 adopts for the special group of pensioners the system of providing benefits in kind on behalf of another Member State of the general coordination of sickness, maternity and long-term care benefits. See Art. 29 with regard to cash benefits.

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II. Commentary 1. Granting of benefits in kind in Member States other than the State of residence

Benefits in kind are provided by the competent institution of the State of resi- 2 dence at the expense of the institution competent for the pensioner (one of the States granting this pension) in compliance with the general principles concerning the provision of benefits in kind on behalf of another Member State (para. 1 in conjunction with Art. 19). In contrast to the earlier provisions in Art. 31(a) Reg. No. 1408/71 is now di- 3 rect access to the competent institution of the Member State of stay is provided for. As the provider of benefits in kind on behalf of another Member State the in- 4 stitution of the State of residence provides the benefits in kind that become necessary during a stay on its territory under application of its prevailing legislation for benefits (in kind) and at the expense of the institution liable for the provision and costs of the benefit. Please refer to the Commentary to Art. 19 for more details in this respect. 2. Benefits in kind from the competent Member State other than the State of residence

In compliance with Art. 18(1) which is to be applied be applied mutatis mu- 5 tandis, the insured persons and the members of their family are entitled, when staying (temporarily – Art. 1(k)) in a Member State competent for benefits other than the State of residence, to benefits in kind as if they resided in this Member State, i.e. without any restrictions. It is irrelevant whether this concerns unforeseeable emergency treatment or a stay with the purpose of receiving medical treatment. However, an additional requirement for this entitlement to benefits in kind is 6 that the competent Member State “has opted for this” and is listed in Annex IV, currently the case for 15 Member States. 3. Cross-border claims to benefits in kind

The cross-border claim to benefits in kind (appropriate to the condition) with 7 the authorisation of the competent institution as regulated in Art. 20 is extended to encompass pensioners and the members of their families in para. 3. 4. Cost burden

Para. 4 contains the principle of the liability of the competent institution for 8 the costs of the benefits in kind provided in compliance with para. 2-3. Para. 5 constitutes an exception in this respect in that it designates those States of residence as the institutions liable for costs, who have decided on reimbursement

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between the Member States of the costs for benefits provided on their behalf by another Member States on the basis of fixed amounts. This provision is legal basis for relieving the competent institution of its liability for costs (and the provision of benefits).

Article 28 Special rules for retired frontier workers 1.

2.

3.

4. 5.

A frontier worker who has retired because of old-age or invalidity is entitled in the event of sickness to continue to receive benefits in kind in the Member State where he/she last pursued his/her activity as an employed or self-employed person, in so far as this is a continuation of treatment which began in that Member State. ‘Continuation of treatment’ means the continued investigation, diagnosis and treatment of an illness for its entire duration. The first subparagraph shall apply mutatis mutandis to the members of the family of the former frontier worker unless the Member State where the frontier worker last pursued his/her activity is listed in Annex III. A pensioner who, in the five years preceding the effective date of an old-age or invalidity pension has been pursuing an activity as an employed or self-employed person for at least two years as a frontier worker shall be entitled to benefits in kind in the Member State in which he/she pursued such an activity as a frontier worker, if this Member State and the Member State in which the competent institution responsible for the costs of the benefits in kind provided to the pensioner in his/her Member State of residence is situated have opted for this and are both listed in Annex V. Paragraph 2 shall apply mutatis mutandis to the members of the family of a former frontier worker or his/her survivors if, during the periods referred to in paragraph 2, they were entitled to benefits in kind under Article 18(2), even if the frontier worker died before his/her pension commenced, provided he/she had been pursuing an activity as an employed or self-employed person as a frontier worker for at least two years in the five years preceding his/her death. Paragraphs 2 and 3 shall be applicable until the person concerned becomes subject to the legislation of a Member State on the basis of an activity as an employed or self-employed person. The cost of the benefits in kind referred to in paragraphs 1 to 3 shall be borne by the competent institution responsible for the cost of benefits in kind provided to the pensioner or to his/her survivors in their respective Member States of residence.

Art. 29 Reg. No. 987/2009 Application of Article 28 of the basic Regulation If the Member State where the former frontier worker last pursued his activity is no longer the competent Member State, and the former frontier worker or a member of his family travels there with the purpose of receiving benefits in kind pursuant to Article 28 of the basic Regulation, he shall submit to the institution of the place of stay a document issued by the competent institution.

I. Spirit and Purpose 1

This provision was inserted by Reg. No. 883/2004. It enables frontier workers (Art. 1(f)) and former frontier workers who have become pensioners to continue treatment that began in their former State of employment and reflects the efforts undertaken to improve the situation of frontier workers (Recitals No. 8 and 23) 276

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in that it expands their choice with regard to claiming benefits in kind in compliance with Art. 17 and 18 in the case that they terminate their activities as frontier workers. II. Commentary

Pursuant to Art. 17 and Art. 18(1) frontier workers are entitled to claim benefits in kind not only in their Member State of residence, but also in their competent Member State of employment. Art. 18(2)(2) extends this entitlement without restriction to the members of the families of frontier workers. They are in fact given the choice of being treated in the event of sickness either in their Member State of residence or in their State of employment or self-employment. The regulation laid down in para. 1 enables them to continue treatment begun in their State of employment even after they have retired due to old age or invalidity, regardless of which Member State is competent for sickness, maternity and longterm care benefits in compliance with conflict-of-law rules. In other words the institution of the former State of employment therefore provides benefits in kind on behalf of the competent Member State in compliance with the legislation it applies for benefits in kind (in compliance with Art. 22-25) at the expense of the competent institution (Art. 5). The term “continuation of treatment” in para. 1(2) is given a broad legal definition. It is linked to the illness and includes the “continued investigation”, diagnosis and treatment of an illness for its entire duration, which in the case of chronic illnesses can involve a very long period of time. Para. 2 goes further than para. 1 in that it grants former frontier workers, i.e. pensioners who in the last five years before (“the occurrence”, i.e. the legal commencement) retiring due to old age or invalidity pursued an activity or were employed as frontier workers for at least two years, the right to benefits in kind (to be provided on behalf of another Member State) in the State of employment, provided this State and in particular also the Member State liable for the costs, have opted for this possibility and this is documented by means of entry in Annex V. It therefore concerns a voluntary expansion of the coordination to encompass this group of persons, to which currently seen Member States have declared themselves willing (Belgium, Germany, France, Luxembourg, Austria, Portugal and Spain). There are additional restrictions for the members of the family of former frontier workers. The former Member State of employment must not be listed in the negative list of Annex III (para. 1, sub-para. 2) and the members of the family must have claimed benefits in kind in compliance with Art. 18(2) in the competent Member State of employment within the deadline set before start of the pension or death of the frontier worker. The rights of the former frontier workers and their family members in compliance with para. 2 and 3 can be claimed until such time as the respective person

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with the entitlement takes up an activity as an employed or self-employed person that is subject to the legislation of a Member State (para. 4). This complies with the general precedence of compulsory affiliation and entitlement to benefits due to an activity as an employed or self-employed person (see Art. 31). Entitlement to this claim to benefits in kind must be proved vis-à-vis the institution providing the benefit in kind on behalf of another Member State by means of a portable document S 3 (Art. 29 Reg. No. 987/2009). 7 Para. 5 simply clarifies that that the institution competent for the costs of benefits in kind in the Member State of residence is also designated as liable for the costs of the receipt of the benefits in kind in compliance with this provision.

Article 29 Cash benefits for pensioners 1.

2. 1

Cash benefits shall be paid to a person receiving a pension or pensions under the legislation of one or more Member States by the competent institution of the Member State in which is situated the competent institution responsible for the cost of benefits in kind provided to the pensioner in his/her Member State of residence. Article 21 shall apply mutatis mutandis. Paragraph 1 shall also apply to the members of a pensioner's family.

The institution competent under conflict-of-law rules is designated as liable for the provision and costs of cash benefits, i.e. the institution liable for the costs of benefits in kind provided in the Member State of residence in compliance with Art. 23-25. Please see Art. 21 for more details in this respect.

Article 30 Contributions by pensioners 1.

2.

The institution of a Member State which is responsible under the legislation it applies for making deductions in respect of contributions for sickness, maternity and equivalent paternity benefits, may request and recover such deductions, calculated in accordance with the legislation it applies, only to the extent that the cost of the benefits under Articles 23 to 26 is to be borne by an institution of the said Member State. Where, in the cases referred to in Article 25, the acquisition of sickness, maternity and equivalent paternity benefits is subject to the payment of contributions or similar payments under the legislation of a Member State in which the pensioner concerned resides, these contributions shall not be payable by virtue of such residence.

Article 30 Reg. No. 987/2009 Contributions by pensioners If a person receives a pension from more than one Member State, the amount of contributions deducted from all the pensions paid shall under no circumstances be greater than the amount deducted in respect of a person who receives the same amount of pension from the competent Member State.

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I. Spirit and Purpose

This provision constitutes a substantive change, a clearer formulation of the 1 regularity content and an expansion to include equalised paternity benefits of Art. 33 Reg. (EEC) No. 1408/71 concerning the levying of contributions for the protection of pensioners in the event of sickness and maternity. It builds on the regulation of competences under the law pertaining to benefits which it applies to contribution law and confirms (with Art. 29) a uniform and comprehensive regulation of competences under conflict-of-law rules, thus preventing double burdening of the pensioner. In addition persons drawing foreign pensions are protected against any comparably excessive payment of contributions. II. Commentary

Para. 1 determines for health insurance schemes of the Member States fi- 2 nanced by contributions, that only the institution competent for the provision of the benefits pursuant to Art. 23-26 due to its also being liable for the costs may levy and demand contributions. This provision confirms the conflict-of-law content of this regulation in that it determines in parallel and consistently which Member State’s contribution legislation is to be applied exclusively for the health insurance of pensioners (see Commentary to Section 2 para. 6). This also means inversely “only” that no contributions may be levied by the legislation which is not applicable for the levying of contributions under the aforementioned conflict-of-law rules. Even under application of Reg. No. 1408/71 the levying of contributions was 3 only permitted for pension institutions of the Member State whose (health insurance) institutions were liable for the benefits in this section. The deductions of contributions was also not permitted for the other pension institutions under the former legal situation (see CJEU, Case 275/83 (Commission/Belgium), EU:C: 1985:149). Nevertheless, many issues still remained uncertain in this respect (cf. CJEU, Case C-50/05 (Nikula), EU:C:2006:493). Many previously uncertain issues (in particular the extent of the levying of 4 contributions) were resolved by the addition in para. 1 whereby contributions are to be “calculated in accordance with the legislation it applies”. This made it clear that the manner of levying contributions and the amount of the contributions are subject to the respectively applicable legislation of the Member State. In particular the amount of the social security contributions of a pensioner is calculated in compliance with the legislation of the Member State on the basis of the complete amount of his/her income, regardless of whether this income derives from pensions drawn in the Member State of residence or from pensions from other Member States. Restrictions based on Community law would not be permissible as they would constitute an impermissible intervention in the competence of the Member States to arrange their own social systems (CJEU, Case C-103/06 (Derouin), EU:C:2008:185). This competence of the Member States, Rolf Schuler

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which specifically entails the possibility of levying contributions due to the receipt of foreign pensions, is confirmed and limited by the prohibition of disadvantageous treatment laid down in Art. 30 Reg. No. 987/2009, whereby in the case of pensions being drawn from other Member States, the amount of contributions deducted from all the pensions paid shall not be greater than the amount deducted in the case of national pensions. 5 Para. 2 determines that the above-mentioned principles also apply to the situation in Art. 25, if persons drawing more than one pension reside in a Member State that, although it has no insurance system (in particular in a Member State with a national health system), is nevertheless liable for costs vis-à-vis institutions of another Member State. The pensioner cannot be called up to pay contributions in the Member State of residence in this case, either, because its contribution legislation is not applicable.

Section 3 Common provisions Article 31 General provision Articles 23 to 30 shall not apply to a pensioner or the members of his/her family who are entitled to benefits under the legislation of a Member State on the basis of an activity as an employed or self-employed person. In such a case, the person concerned shall be subject, for the purposes of this Chapter, to Articles 17 to 21.

Art. 31 is a conflict-of-law rule that, in the event that a pensioner or his/her members of the family are also simultaneously insured and entitled to benefits in kind on the basis of an activity as employed or self-employed persons in a Member State, regulates the priority of compulsory insurance and the right to benefits in kind arising from such employment and in the Member State of employment vis-à-vis the compulsory insurance as a pensioner. In this case only the coordinating provisions for employed or self-employed persons pursuant to Art. 17 to 21 Reg. No. 883/2004 apply to such persons. Art. 23 et seq. therefore apply to a large extent only for persons who are insured solely as pensioners. Art. 31 is based on the priority of social security arising from the employment and the priority of the place of employment in the conflict-of-law legislation of the Community (cf. Steinmeyer, Art. 11 para 9 et seq.). 2 The wording of Art. 31 corresponds to a large extent with that of Art. 34 (2) Reg. No. 1408/71. 3 Please see Art. 1 (w) and Spiegel, Art. 1 para 38 above for the term pension and pensioner. Applicability of the conflict-of-law rule requires that a pension is actually drawn. The replacement of Art. 23 et seq., the provisions for the health insurance of a pensioner, by Art. 17 et seq. Reg. No. 883/2004 then requires fur1

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ther that the pensioner and employed person actually acquire independent rights from health insurance coverage arising from his/her activity as an employed or self-employed person (different opinion apparently and contrary to the wording of Art. 31 Klein, in: Hauck/Noftz, EU-Sozialrecht, Art. 31 para 6). Art. 31 only regulates the consequences of conflict-of-law rules where bene- 4 fits in kind are concerned. The status relationship, the legislation applicable for affiliation and compulsory insurance and the resulting rules concerning the obligation to make contributions and avoidance of double collection of contributions are determined in compliance with Art. 11 Reg. No. 883/2004 (see Steinmeyer, Art. 11 para 2 et seq., 9 et seq. above). However, the result is the same: priority of the status right of the place of employment.

Article 32 Prioritising of the right to benefits in kind – special rule for the right of members of the family to benefits in the Member State of residence (1) An independent right to benefits in kind based on the legislation of a Member State or on this Chapter shall take priority over a derivative right to benefits for members of a family. A derivative right to benefits in kind shall, however, take priority over independent rights, where the independent right in the Member State of residence exists directly and solely on the basis of the residence of the person concerned in that Member State. (2) Where the members of the family of an insured person reside in a Member State under whose legislation the right to benefits in kind is not subject to conditions of insurance or activity as an employed or self-employed person, benefits in kind shall be provided at the expense of the competent institution in the Member State in which they reside, if the spouse or the person caring for the children of the insured person pursues an activity as an employed or self-employed person in the said Member State or receives a pension from that Member State on the basis of an activity as an employed or self-employed person.

I. Spirit and Purpose, Fundamental Structure and History of Origin

Art. 32 adopts in part the provisions previously included in Art. 19 (2) and 1 21(2) Reg. No. 1408/71, but states the old provision more precisely and ensures more exactly and consistently the priority of the right deriving from an insurance over the right deriving solely from residency (public/national health service). Art. 32 contains a conflict-of-law rule, defining the institution competent for 2 the benefits in kind and therefore also the applicable legislation for two possibly overlapping conflicts, that only ever occur in the case of members of the family: firstly conflicting rights arising from an independent right on the one hand and a derivative right on the other (for members of the family) and secondly rights arising solely from residency (based on systems of public health services) and those arising from employment or generally from insurance. Art. 32 lays down the basic principle that an independent right takes priority over a derivative Karl-Jürgen Bieback

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right. However, this principle is not to be followed by way of exception if the independent right is a right based solely on residency; in this case the right derived from insurance takes priority over the (independent) right based solely on residency. 3 In order to protect systems of public health services Art. 32 (2) makes another exception to this exception – albeit in a linguistically unsuccessful manner that is difficult to comprehend: If, where members of the family are concerned, the spouse or person caring for the children of the insured person simultaneously pursues an activity as an employed or self-employed person in his/her Member State of residence or receives a pension from an institution in said Member State of residence, then the rights of the Member State of residence have priority. Admittedly the condition of employment does not give rise to any independent rights in a Member State of residence that has a public health system, as such rights already arise and are based solely on residency. However, where the “competent Member State” with an insurance system is concerned, it is not justifiable to always make this State liable for benefits in kind for members of a family living in another Member State if these members of a family would in fact have independent rights from insurance arising from employment or pension if an “insurance scheme” were applicable in their Member State of residence with the public health service. II. Commentary

Please see Art. 1 (i) for the term member of the family. For the term place of residence see Art. 1 (j). 5 The right that exists “directly and solely on the basis of residence” mentioned in para. 1 is defined in para. 2 as a right that is “not subject to conditions of insurance, or activity as an employed or self-employed person”. The two definitions are understood as being congruent, although their content is not necessarily congruent; social security legislation, but not the health insurance legislation of the Member States, also provides for rights to benefits in kind based on citizenship and not on residence or insurance. The definition is identical with that in the conflict-of-law rule in Art. 25 Reg. No. 883/2004 (cf. Schuler Art. 25 para 1 above). 6 Art. 32 regulates competition between rights to benefits in kind. For this reason it is first necessary to verify which legislation is to be applied (especially Art. 11 and Art. 17 Reg. No. 883/2004; cf members of the family in Art. 17 para 10 above). In a second step it must be verified whether a right to benefits in kind exists under this national legislation; whereby attention must be paid here to the national competition rules concerning the priorities of rights arising from employment and those derived as a member of the family. Not until it is subsequently verified that rights to benefits in kind exist under the different legislations does the conflict-of-law rule of Art. 32 become effective in a third step. 4

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Article 33

However, this suppresses the national conflict-of-law rules in the second verification step, as in this step the provisions for equal treatment of foreign facts and events (Art. 5 Reg. No. 883/2004) and recognition of foreign insurance times (Art. 6 Reg.) must be respected.

Article 33 Substantial benefits in kind (1) An insured person or a member of his/her family who has had a right to a prosthesis, a major appliance or other substantial benefits in kind recognised by the institution of a Member State, before he/she became insured under the legislation applied by the institution of another Member State, shall receive such benefits at the expense of the first institution, even if they are awarded after the said person has already become insured under the legislation applied by the second institution. (2) The Administrative Commission shall draw up the list of benefits covered by paragraph 1.

I. Spirit and Purpose and History of Origin

This provision corresponds to a large extent with that of Art. 24 Reg. No. 1 1408/71. The purpose here is to leave the competence for the provision of often expensive, complicated and time-consuming substantial benefits in kind unaffected, in the event a worker moves to another Member State after having received the right to the benefit in kind and then becoming insured there with another institution. As the old institution providing the benefit in kind remains competent, the change of the place of employment does not infringe on the right and freedom of movement is protected. This also applies if, for example, an insured frontier worker receives unemployment benefits in his/her Member State of residence, so that pursuant to the Art. 11 (3) (c) and 65 Reg. No. 883/2004 the institution of the Member State of residence now becomes the competent institution, but the worker had already received benefits in kind in the Member State of employment. This provision is a partial exception to the determination of the insured status in Art. 11 Reg. No. 883/2004 as well as an exception to the cost regulation in Art. 35 Reg. No. 883/2004. II. Commentary

Whether and as of when a right “to a prosthesis, a major appliance or other 2 substantial benefits in kind is recognised” is determined by the national legislation. If there is no formal procedure for the “recognition” or “application” for the benefit in kind, it must be sufficient that the insured person had a right to the benefit before the change, if the right has been adequately specified in compliance with the respective administrative procedures (prescribed by a doctor; granted during a stay in hospital). So Decision S8 of the Administrative Com-

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mission gives an alternative based on the fact that the benefit in kind is “provided”; the actual granting and/or allocation of the benefit in kind are therefore sufficient. 3 The Administrative Commission defined the list in Decision No. 115 from 15.12.1982 (OJ (EC) C 193 from 20.7.1983, p. 7) for the old, identical legislation (Art. 24 Reg. No. 1408/71). It was identical to the list issued to Art. 17 (7) Reg. No. 574/72 in Decision No. 135, with the exception that it included no lower value limit. Both Decisions were repealed with the coming into effect of the new Reg. No. 883/204 (Decision H1 of the Administrative Commission) and were replaced by the identical Decision No. S 8 from 15.6.2011 (OJ. C 262 from 6.9.2011, s. 6–7). 4 Decision S 8 of the Administrative Commission defines prostheses, major appliances and other substantial benefits in kind in compliance with Art. 33 (1) according to three characteristics that derive from the wording or classification of Chapter I: – “are tailored to specific personal needs, and – are in the course of being provided, or have been granted but yet not provided, and – are defined or/and treated as such by the Member State under whose legislation the insured person was insured before he/she became insured under the legislation of another Member State.“ 5

It includes as an Annex a non-exhaustive (Art 1 (2) of the Decision) list. The list includes: 1. “Prostheses a) orthopaedic prostheses; b) visual aids such as ocular prostheses; c) dental prostheses (fixed and removable). 2. Major appliances d) wheelchairs, orthose, footwear, and other aids for moving, standing and sitting; e) contact lenses, magnifying and telescopic spectacles; f) hearing and speech aids; g) nebulisers; h) obturators for use in the buccal cavity; i) orthodontic appliances. 3. Other substantial benefits in kind j) specialist inpatient treatments; k) treatment at a health resort; l) therapeutic rehabilitation; m) complementary means of diagnosis; n) any subsidy granted to cover part of the costs of the benefits listed above.”

Article 34 Overlapping long-term care benefits (1) If a recipient of long-term care benefits in cash, which have to be treated as sickness benefits and are therefore provided by the Member State competent for cash benefits under Articles 21 or 29, is, at the same time and under this Chapter, entitled to claim benefits in kind intended for the same purpose from the institution of the place of residence or stay in another Member State, and an institution in the first Member State is also required to reimburse the cost of these benefits in kind under Article 35, the general provision on prevention of overlapping of benefits laid down in Article 10 shall be applicable, with the following restriction only: if the person concerned claims and receives the benefit in kind, the amount of the benefit in cash shall be reduced by the amount of the 284

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Article 34 benefit in kind which is or could be claimed from the institution of the first Member State required to reimburse the cost. (2) The Administrative Commission shall draw up the list of the cash benefits and benefits in kind covered by paragraph 1. (3) Two or more Member States, or their competent authorities, may agree on other or supplementary measures which shall not be less advantageous for the persons concerned than the principles laid down in paragraph 1. Article 31 Reg. No. 987/2009 Application of Article 34 of the basic Regulation A. Procedure to be followed by the competent institution (1) The competent institution shall inform the person concerned of the provision contained in Article 34 of the basic Regulation regarding the prevention of overlapping of benefits. The application of such rules shall ensure that the person not residing in the competent Member State is entitled to benefits of at least the same total amount or value as those to which he would be entitled if he resided in that Member State. (2) The competent institution shall also inform the institution of the place of residence or stay about the payment of long-term care cash benefits where the legislation applied by the latter institution provides for the long-term care benefits in kind included in the list referred to in Article 34(2) of the basic Regulation. B. Procedure to be followed by the institution of the place or residence or stay (3) Having received the information provided for in paragraph 2, the institution of the place of residence or stay shall without delay inform the competent institution of any long-term care benefit in kind intended for the same purpose granted under its legislation to the person concerned and of the rate of reimbursement applicable thereto. (4) The Administrative Commission shall lay down implementing measures for this Article where necessary.

I. Spirit and Purpose and History of Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Material scope: overlapping of cash benefits and benefits in kind. . 2. Consequence: Overlapping, but deduction of the benefit in kind from the cash benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. List pursuant to Art. 34 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Deviating agreements in compliance with Art. 34 (3) . . . . . . . . . . . . . . .

1 3 3 11 16 17 18

I. Spirit and Purpose and History of Origin

Art. 34 Reg. No. 883/2004 regulates the case of conflict-of-law where a per- 1 son can claim a long-term care benefit in cash from the institution of the competent Member State (care allowance for procuring care services) and at the same time a benefit in kind for long-term care from the institution of the Member State of residence or stay (long-term care benefit in kind) to be charged to the competent institution. In this case both rights exist simultaneously, so the antiaccumulation principle in Art. 10 Reg. No. 883/2004 is modified. However, the claimant must allow the amount of the claimed and received long-term care benefit in kind to be deducted from the cash benefit, such as care allowance. This provision is new and has no predecessor in Reg. No. 1408/71. Recital 24 states in this respect: “It is necessary to establish specific provisions regulating the non-overlapping of sickness benefits in kind and sickness benefits in cash which are of the same nature as those which were the subject of the judgments of the Court of Justice in Case C-215/99 (Jauch), EU:C:2001:139 and C-160/96 (Molenaar), EU:C:1998:84, provided that those benefits cover the same risk.”

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Art. 34 is based on the division of coordinating benefits into benefits in kind that cannot be exported and cash benefits that can. It adopts the case law of the CJEU, namely that long-term care benefits constitute sickness benefits as it is the aim of these benefits to improve “the state of health and the quality of life of persons reliant on care” (see above Preamble Art. 17 para 23 et seq.). Under the legislation concerning long-term care insurance cash benefits are closely related to long-term care benefits in kind and are intended to enable the “procurement” of care services (s. see also Jorens et al, trESS Think Tank Report 2011, Part I p. 9 et seq for these peculiarities and differences). The cases of the CJEU (case C-208/07 (von Chamier-Glisczinski), EU:C:2009:455; case C-388/09 (da Silva Martins), EU:C:2011:439) indicate that it is almost impossible here to find an adequate solution with the present regulations. Nevertheless, it is difficult to understand why an exception to the principle of Art. 10 Reg. No. 883/2004 is necessary. II. Commentary 1. Material scope: overlapping of cash benefits and benefits in kind

The first condition is that the insured person reliant on care has a right to long-term care cash benefits, such as the care allowance for care provided by a third person, e.g. according to the German health care insurance or the care allowance according to Austrian or Flemish legislation (Preamble to Art. 17 para 23 et seq. above; case C-388/09 (da Silva Martins), EU:C:2011:439, para 43/4). Whether or not this is to be treated as a cash benefit must be decided according to the Regulation (see above Art. 17 para 4 et seq. above): benefits in kind refer to personal healthcare services as well as medicines and medical aids, even if the health insurance pays cash for these as part of cost reimbursement or payment of costs (case C-466/04 (Acereda Herrera), EU:C:2006:405, para 29 et seq.; case C-160/96 (Molenaar), EU:C:1998:84, para 31; case 61/65 (Vaassen-Göbbels), EU:C:1966:39). If cash benefits serve the procurement of a service or reimbursement of the costs incurred for the procurement of this service (cost reimbursement), then they are benefits in kind (Art. 1 (va)(ii)). Cash benefits are accorded no special definition in the Reg. They are the counterpart of the definition of “benefit in kind”. Cash benefits are therefore separate from the purposes of treatment; the insured person can dispose of them as he/she likes and they are granted independently of whether and to what amount costs for care have been incurred; they often replace wages (case C-160/96 (Molenaar), EU:C:1998:84, para 31). For this reason the CJEU has classified German care allowance as a cash benefit (in the case of sickness), so that it must also be exported pursuant to Art. 21 VO (EG) Nr. 883/2004 (case C-160/96 (Molenaar), EU:C:1998:84, reaffirmed in case C-466/04 (Acereda Herrera), EU:C:2006:405, para 29 et sequ.). 4 It must be noted further, that the benefits must fall within the material scope of Reg. No. 883/2004. In the case of benefits at the place of residence these must 3

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concern benefits in accordance with Art. 3 (1) Reg. No. 883/2004 and not social and medical assistance (Art. 3 (5) Reg. No. 883/2004) or special non-contributory benefits (Art. 3 (3) in conjunction with Art 70 (3)(4) Reg. No. 883/2004), as these latter two do not fall under Art. 34. Although there are compelling reasons to assume that all long-term care benefits in all Member States fall under Reg. No. 883/2004 (see Jorens et al, trESS Think Tank Report 2011, Part II, 3 p. 24/5). The coordinating legislation is in principle not applicable for social and medical assistance and Art. 34 not for special non-contributory benefits (Art. 70 (3) Reg. No. 883/2004). Under I, 2 the Administrative Commission decided (Decision No. S5 of 5 2.10.2009 OJ No. C 106 from 24.4.2010, s. 54-55): “2. The following shall also be regarded as benefits in kind within the meaning of the abovementioned Articles of the Basic Regulation: a) Care insurance benefits in kind giving entitlement to full or partial direct payment of certain expenditure entailed by the insured person’s reliance on care and incurred for his or her direct benefit, for example nursing care and home help provided in the home or in specialised establishments, purchases of care equipment, or work carried out to improve the home environment; benefits of this kind are essentially intended to supplement sickness insurance benefits in kind in order to improve the state of health and the quality of life of persons reliant on care; b) Benefits in kind not arising from care insurance but having the same characteristics and purposes as those referred to in (a) above, in so far as they may be regarded as social security benefits in kind within the meaning of the Basic Regulation and may be acquired in the same way as those referred to in (a) in accordance with the provisions of the abovementioned Articles of the Basic Regulation.” The conditions for the entitlement to cash benefits must be examined accord- 6 ing to the national legislation of the competent institution, especially insurance affiliation/claim ownership and the reliance on care. Whereby Art. 5 (Equal treatment of facts) and Art. 6 Reg. No. 883/2004 (Aggregation of periods) must also be taken into consideration here. However, exportability is based exclusively on Art. 21 Reg. No. 883/2004. On the other hand, the same person’s right to long-term care benefits in kind 7 is determined in accordance with the legislation of the Member State of residence. Here, too, all conditions must be satisfied, both where the fundamental right to a claim is concerned (insurance affiliation, citizenship status etc.) as well as the need for long-term care and other conditions. That a cash benefit and a benefit in kind must serve the same purpose still re- 8 mains a condition. This is not to be understood strictly in the sense that the cash benefit must be used explicitly and necessarily (according to the respective national legislation) for the procurement of care services, it is sufficient – as recital Karl-Jürgen Bieback

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No. 24 clearly indicates – that the cash benefit serves to cover the same risk. This was also the issue in the relevant CJEU cases. Where German care allowance is concerned the CJEU stressed in the Case Molenaar (case C-160/96 (Molenaar), EU:C:1998:84) that the cash benefit need not necessarily be used for specific benefits in kind, but that it is sufficient that the care provided by a third party is covered; it was exactly this freedom to dispose of the benefit freely that was decisive for the CJEU in deeming this benefit a cash benefit. This was made even clearer in the Case Jauch concerning the Austrian Federal Law on care allowance, which is paid to recipients of a pension or an old-age pension as a supplement to their pensions in order to compensate extra sickness-related expenses (case C-251/99 (Jauch), EU:C:2001:139). cf also Art 17 para 4 et seq. above. 9 However, there is no identity of purposes if the connection to the risk of longterm reliance on care is very loose and the cash benefit is not paid to the person reliant on care at all, as was the case in the decision of the CJEU concerning statutory and private care insurance contributions to the pension insurance of the carer (case C-502/01 und C-31/02 (Gaumain-Cerri and Barth), EU:C:2004:413). 10 So both benefits must come together in the Member State of residence, albeit in different forms. Art. 34 (1) Reg. No. 883/2004 requires that the cash benefit is “rendered”, i.e. actually received, which is as a rule exported to the Member State of residence in which the insured person can also simultaneously claim a long-term care benefit in kind. All that is required is an entitlement to the benefit in kind (“if … entitled to claim …”). If it is required that the benefit in kind is also actually rendered, then the conflict is not accounted for that the insured person does not assert his/her right to the benefit in kind in the scheme of purely benefits in kind of his/her place of residence, in order to purchase a care service outside of the scheme with the claim to a cash benefit. 2. Consequence: Overlapping, but deduction of the benefit in kind from the cash benefit

Art. 34 includes the legal consequence of the existence of two simultaneous entitlements, thus constituting an exception to the prohibition of overlapping benefits laid down in Art. 10 Reg. No. 883/2004. However, pursuant to the case law of the CJEU this principle was restricted by the principle of favourability (above Art. 10 para 3). Art. 34 is a specification of this principle: the entitlement to a cash benefit that is in principle exportable is not to be lost in as far as it exceeds the amount of the benefit in kind in the Member State of residence. 12 The “amount to be offset”, i.e. the monetary value of the benefit in kind, is determined by the amount the institution of the place of residence charges the institution competent for the cash benefit in compliance with Art. 35 Reg. No. 883/2004, or that it could charge (because the competent institution is not liable for the benefit in kind in the Member State of residence). Even if reimbursement is effected on the basis of fixed amounts in compliance with Art. 35 (2), the ac11

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tual expenses must be charged and possibly calculated by the institution of the place of residence and then deducted from the cash benefit by the competent institution (treated in more detail Jorens et al, trESS Think Tank Report 2011, Part II, 4.3 p. 28/9). This is the only way to ensure that real overlapping is prevented and overprovision avoided. It would not otherwise be possible to calculate the share to be deducted transparently: What is the share of the amount of the benefit in kind in the fixed amount? When can the competent institution deduct this share, if specific (which benefits and how many) long-term care benefits in kind have been claimed or if the case of a reliance on care benefits has already arisen (see para 9 above)? Art. 31 (1) Reg. No. 987/2009 ensures that the minimum value of the cash 13 claim in the case of export to the Member State of residence is at least the same total amount or value as that to which the insured person would be entitled if he/she resided in the Member State competent for cash benefits. So the minimum amount is only of relevance if the benefits in kind in the Member State of residence are below the level of the benefits in kind in the Member State competent for cash benefits. The cash benefit is then increased (only) in as far as it puts the insured person in a position to achieve this level of benefits in kind in the Member State of residence. The competent institution can only offset what can be offset against each oth- 14 er according to its legislation. So a care allowance according to German legislation is paid only instead of the benefit in kind of home help provided by a qualified nurse (§ 37 SGB XI), but not for care equipment (§ 40 Abs. 1 SGB XI) and not for work carried out to improve the home environment (§ 40 (1) SGB XI). If these benefits are provided in the Member State of residence, they cannot be offset against care allowance. If the national legislation of the competent institution includes (anti-)overlap- 15 ping provisions, then in view of the equal treatment of facts (Art. 5 Reg. No. 883/2004) the benefit in kind in the Member State of residence must be treated equally to the receipt of benefits in kind in the competent state (especially as the competent institution will as a rule reimburse the costs for these in compliance with Art. 35 Reg. No. 883/2004) and the competent institution can then offset the shares and the value of the benefit in kind in compliance with national legislation. Because the cash claim in fact serves to satisfy the reliance on care and cannot be calculated without taking this need into consideration. In this respect national overlapping legislation takes priority over Art. 34 Reg. No. 883/2004 and does not infringe on it (different opinion Schreiber, in: Schreiber et al, Reg. No. 883/2004, 2012, Art. 34 para 14). 3. Procedure

The procedures laid down in Art. 31 implementing Reg. ensure that both in- 16 stitutions inform each other thus enabling the offsetting and preventing double provision of benefits. Art. 28 Reg. No. 987/2009 is applicable for the payment of Karl-Jürgen Bieback

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cash benefits to the place of residence in the case of long-term reliance on care and for medical examinations at the place of residence (see Art. 21 para 8 et seq. above). 4. List pursuant to Art. 34 (2) 17

The Administrative Commission decided on the list mentioned in Art. 34 (2) in May 2010 (at: http://ec.europa.eu/social/main.jsp?langId=de&catId=868). It must be criticised that the list only indicates whether there are cash benefits or benefits in kind in the countries in the case of the reliance on long-term care, but does not specify these in any detail. 5. Deviating agreements in compliance with Art. 34 (3)

18

Art. 34 (3) authorises the conclusion of deviating agreements between the Member States as well as between the competent authorities/institutions.

Article 35 Reimbursements between institutions (1) The benefits in kind provided by the institution of a Member State on behalf of the institution of another Member State under this Chapter shall give rise to full reimbursement. (2) The reimbursements referred to in paragraph 1 shall be determined and effected in accordance with the arrangements set out in the Implementing Regulation, either on production of proof of actual expenditure, or on the basis of fixed amounts for Member States the legal or administrative structures of which are such that the use of reimbursement on the basis of actual expenditure is not appropriate. (3) Two or more Member States, and their competent authorities, may provide for other methods of reimbursement or waive all reimbursement between the institutions coming under their jurisdiction. Title IV of Reg. No. 987/2009 Financial Provisions Chapter I Reimbursement of the costs of benefits in application of Article 35 and Article 41 of the basic Regulation Section 1 Reimbursement on the basis of actual expenditure Article 62 Reg. No. 987/2009 Principles (1) For the purposes of applying Article 35 and Article 41 of the basic Regulation, the actual amount of the expenses for benefits in kind, as shown in the accounts of the institution that provided them, shall be reimbursed to that institution by the competent institution, except where Article 63 of the implementing Regulation is applicable. (2) If any or part of the actual amount of the expenses for benefits referred to in paragraph 1 is not shown in the accounts of the institution that provided them, the amount to be refunded shall be determined on the basis of a lump-sum payment calculated from all the appropriate references obtained from the data available. The Administrative Commission shall assess the bases to be used for calculation of the lump-sum payment and shall decide the amount thereof.

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Article 35 (3) Higher rates than those applicable to the benefits in kind provided to insured persons subject to the legislation applied by the institution providing the benefits referred to in paragraph 1 may not be taken into account in the reimbursement. Section 2 Reimbursement on the basis of fixed amounts Article 63 Reg. No. 987/2009 Identification of the Member States concerned (1) The Member States referred to in Article 35(2) of the basic Regulation, whose legal or administrative structures are such that the use of reimbursement on the basis of actual expenditure is not appropriate, are listed in Annex 3 to the implementing Regulation. (2) In the case of the Member States listed in Annex 3 to the implementing Regulation, the amount of benefits in kind supplied to: a) family members who do not reside in the same Member State as the insured person, as provided for in Article 17 of the basic Regulation; and to b) pensioners and members of their family, as provided for in Article 24(1) and Articles 25 and 26 of the basic Regulation; shall be reimbursed by the competent institutions to the institutions providing those benefits, on the basis of a fixed amount established for each calendar year. This fixed amount shall be as close as possible to actual expenditure. Article 64 Reg. No. 987/2009 Calculation method of the monthly fixed amounts and the total fixed amount (1) For each creditor Member State, the monthly fixed amount per person (Fi) for a calendar year shall be determined by dividing the annual average cost per person (Yi), broken down by age group (i), by 12 and by applying a reduction (X) to the result in accordance with the following formula:: Fi = Yi*1/12*(1-X) Where – the Index (i = 1, 2 or 3) stands for the three age groups taken into account when calculating the fixed amount: – i = 1: persons under 20 years of age, – i = 2: persons between 20 and 64 years of age, – i = 3: persons of 65 years of age and older, – Yi stands for the annual average cost per person in the age group i pursuant to paragraph 2, – the coefficient X (0.20 or 0.15) stands for the reduction pursuant to paragraph 3. (2) The annual average cost per person (Yi) in age group i shall be obtained by dividing the annual expenditure on all benefits in kind provided by the institutions of the creditor Member State to all persons in the age group concerned subject to its legislation and residing within its territory by the average number of persons concerned in that age group in the calendar year in question. The calculation shall be based on the expenditure under the schemes referred to in Article 23 of the implementing Regulation. (3) The reduction to be applied to the monthly fixed amount shall, in principle, be equal to 20 % (X = 0,20). It shall be equal to 15 % (X = 0,15) for pensioners and members of their family where the competent Member State is not listed in Annex IV to the basic Regulation. (4) For each debtor Member State, the total fixed amount for a calendar year shall be the sum of the products obtained by multiplying, in each age group i, the determined monthly fixed amounts per person by the number of months completed by the persons concerned in the creditor Member State in that age group. The number of months completed by the persons concerned in the creditor Member State shall be the sum of the calendar months in a calendar year during which the persons concerned were, because of their residence in the territory of the creditor Member State, eligible to receive benefits in kind in that territory at the expense of the debtor Member State. Those months shall be determined from an inventory kept for that purpose by the institution of the place of residence, based on documentary evidence of the entitlement of the beneficiaries supplied by the competent institution. (5) No later than 1 May 2015, the Administrative Commission shall present a specific report on the application of this Article and in particular on the reductions referred to in paragraph 3. On the basis of that report, the Administrative Commission may present a proposal containing any amendments which may prove necessary in order to ensure that the calculation of fixed amounts comes as close as possible to the actual expenditure incurred and the reductions referred to in paragraph 3 do not result in unbalanced payments or double payments for the Member States. (6) The Administrative Commission shall establish the methods for determining the elements for calculating the fixed amounts referred to in paragraphs 1 to 5. (7) Notwithstanding paragraphs 1 to 4, Member States may continue to apply Articles 94 and 95 of Regulation (EEC) No 574/72 for the calculation of the fixed amount until 1 May 2015, provided that the reduction set out in paragraph 3 is applied.

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Part 2: Regulation (EC) No 883/2004 Article 65 Reg. No. 987/2009 Notification of annual average costs (1) The annual average cost per person in each age group for a specific year shall be notified to the Audit Board at the latest by the end of the second year following the year in question. If the notification is not made by this deadline, the annual average cost per person which the Administrative Commission has last determined for a previous year will be taken. (2) The annual average costs determined in accordance with paragraph 1 shall be published each year in the Official Journal of the European Union. Section 3 Common provisions Article 66 Reg. No. 987/2009 Procedure for reimbursement between institutions (1) The reimbursements between the Member States concerned shall be made as promptly as possible. Every institution concerned shall be obliged to reimburse claims before the deadlines mentioned in this Section, as soon as it is in a position to do so. A dispute concerning a particular claim shall not hinder the reimbursement of another claim or other claims. (2) The reimbursements between the institutions of the Member States, provided for in Articles 35 and 41 of the basic Regulation, shall be made via the liaison body. There may be a separate liaison body for reimbursements under Article 35 and Article 41 of the basic Regulation. Article 67 Reg. No. 987/2009 Deadlines for the introduction and settlement of claims (1) Claims based on actual expenditure shall be introduced to the liaison body of the debtor Member State within 12 months of the end of the calendar half-year during which those claims were recorded in the accounts of the creditor institution. (2) Claims of fixed amounts for a calendar year shall be introduced to the liaison body of the debtor Member State within the 12-month period following the month during which the average costs for the year concerned were published in the Official Journal of the European Union. The inventories referred to Article 64(4) of the implementing Regulation shall be presented by the end of the year following the reference year. (3) In the case referred to in Article 6(5) second subparagraph of the implementing Regulation, the deadline set out in paragraphs 1 and 2 of this Article shall not start before the competent institution has been identified. (4) Claims introduced after the deadlines specified in paragraphs 1 and 2 shall not be considered. (5) The claims shall be paid to the liaison body of the creditor Member State referred to in Article 66 of the implementing Regulation by the debtor institution within 18 months of the end of the month during which they were introduced to the liaison body of the debtor Member State. This does not apply to the claims which the debtor institution has rejected for a relevant reason within that period. (6) Any disputes concerning a claim shall be settled, at the latest, within 36 months following the month in which the claim was introduced. (7) The Audit Board shall facilitate the final closing of accounts in cases where a settlement cannot be reached within the period set out in paragraph 6, and, upon a reasoned request by one of the parties, shall give its opinion on a dispute within six months following the month in which the matter was referred to it. Article 68 Reg. No. 987/2009 Interest on late payments and down payments (1) From the end of the 18-month period set out in Article 67(5) of the implementing Regulation, interest can be charged by the creditor institution on outstanding claims, unless the debtor institution has made, within six months of the end of the month during which the claim was introduced, a down payment of at least 90 % of the total claim introduced pursuant to Article 67(1) or (2) of the implementing Regulation. For those parts of the claim not covered by the down payment, interest may be charged only from the end of the 36-month period set out in Article 67(6) of the implementing Regulation. (2) The interest shall be calculated on the basis of the reference rate applied by the European Central Bank to its main refinancing operations. The reference rate applicable shall be that in force on the first day of the month on which the payment is due. (3) No liaison body shall be obliged to accept a down payment as provided for in paragraph 1. If however, a liaison body declines such an offer, the creditor institution shall no longer be entitled to charge interest on late payments related to the claims in question other than under the second sentence of paragraph 1. Article 69 Reg. No. 987/2009 Statement of annual accounts (1) The Administrative Commission shall establish the claims situation for each calendar year in accordance with Article 72(g) of the basic Regulation, on the basis of the Audit Board’s report. To this end, the liaison bodies shall notify the Audit Board, by the deadlines and according to the procedures laid down by the latter, of the amount of the claims introduced, settled or contested (creditor position) and the amount of claims received, settled or contested (debtor position). (2) The Administrative Commission may perform any appropriate checks on the statistical and accounting data used as the basis for drawing up the annual statement of claims provided for in paragraph 1 in order, in particular, to ensure that they comply with the rules laid down under this Title.

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Article 35 I. Spirit and Purpose and History of Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Reimbursement of benefits provided on the basis of actual expenditure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Reimbursement of benefits provided on the basis of fixed amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Reimbursement of benefits provided on the basis of special agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Execution of the procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 6 6 7 9 10

I. Spirit and Purpose and History of Origin

Art. 35 Reg. No. 883/2004 regulates the reimbursement of costs between the 1 competent institutions and the institutions providing benefits on behalf of another institution in all cases where they have shared tasks, in particular the provision of benefits in kind by the institution providing the benefit on behalf of and at the expense of the competent institution (Art. 17 para 14 et seq. above). This is also a focal point of the provisions of Reg. No. 987/2009. Recital 15 states the ensurance of a “balanced sharing of the costs between the Member States” as the aim of the reimbursement provisions. “In particular in the area of sickness, such procedures should take account of the position of Member States which bear the costs of allowing insured persons access to their healthcare system and the position of Member States whose institutions bear the cost of benefits in kind received by their insured persons in a Member State other than that in which they are resident”. Recital No. 18 stresses, that “procedures to reduce the time needed for payment of these claims between Member States’ institutions are essential”. Art. 35 mentions actual expenditure as the basis for reimbursement of costs 2 but also allows reimbursement based on fixed amounts. As reimbursement based on fixed amounts means that the competent institution has fulfilled its financial obligation and the institution of the place of stay or residence providing the benefit ultimately also takes on full financial competence, numerous special regulations are necessary in the event a person returns to the competent state and receives treatment there (Art. 18 (2)(2)) or stays in a third Member State for the purpose of receiving treatment (Art. 20 (4), Art. 27 (3)(5)). Art. 35 and Art. 62-69 Reg. No. 987/2009 determine only reimbursement be- 3 tween the institutions, they do not establish any rights for the insured persons (case C-466/04 (Acereda Herrera), EU:C:2006:405, para 36-39). Earlier approaches of the judgements of the CJEU that included the right to reimbursement between the institutions in its interpretation of the regulation for the rights of the insured person (case C-156/01 (van der Duin), EU:C:2003:389, para. 44 et seq.) can no longer be adopted seamlessly for Reg. No. 883/2004. Because the principle of preventing overlapping competences and double provision of benefits generally (Art. 10 and 11) and in particular (Art. 34) have now been regulated more exactly than was the case in the predecessor Reg. No. 1408/71. In addition regulation of the benefits of the insured persons has been made in the light of a balanced distribution of the cost burden between the institutions (previous Karl-Jürgen Bieback

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para 2); so that wherever they are missing an interpretation should generally not lead to such consideration. 4 Art. 41 Reg. No. 883/2004 refers to Art. 35 which therefore also applies to the reimbursement of costs between the institutions of accident insurance. In compliance with Art. 6 (5) implementing Regulation the rules of Art. 62-69 implementing Regulation also apply for provisionally paid benefits in kind and cash benefits (e.g. in compliance with Art. 6 (2) implementing Regulation in the event of a difference of views between the institutions about which institution or authority should provide the benefits). 5 Art. 35 of the Regulation corresponds to a large extent with Art. 36 Reg. No. 1408/71, albeit with the restriction in paragraph 2 that reimbursement based on fixed amounts is limited to specific Member States. These Member States are listed in Annex 3 of the implementing Regulation; they are (with the exception of the Netherlands) all Member States with a national insurance service that often does not provide for the exact reimbursement of the costs. Unlike the old legislation (Art. 93 et seq. Reg. No. 574/72), calculation of the fixed amount is prescribed for the most part in Art. 63 et seq. implementing Regulation. There are no longer any exceptions from the principle of individual settlement (like that e.g. pursuant to Art. 94 Reg. No. 574/72 reimbursement on the basis of fixed amounts for benefits in kind provided for members of a family that do not resided in the same Member State as the insured person). II. Commentary 1. Reimbursement of benefits provided on the basis of actual expenditure 6

This provision states that the competent institution shall reimburse the institution that provided the benefits for the actual amount of the expenses as shown in the form E 125/in the “Structured Electronic Document” No. S080 (CLA). As a rule the amount charged must be shown in the accounts of the institution that provided the benefits, i.e. registered in the accounts (Art. 62 (2) implementing Regulation). If the actual expenses are not indicated in the accounts, e.g. because reimbursement of a fixed amount has been agreed between the institutions and those giving the treatment (as is often the case between health insurance funds and doctors), then “the amount to be refunded shall be determined on the basis of a lump-sum payment calculated from all the appropriate references obtained from the data available”. So fixed amount payment is also based on estimated actual expenses. As the institution providing the benefits must provide such as if the insured person of the competent institution were insured with the institution providing the benefits, Art. 62 (3) implementing Regulation once again stresses that the competent institution cannot charge higher rates than those it applies itself to its own insured persons. Further details are regulated in Art. 62 and Art. 66 of the implementing Regulation. See also para 11 for the procedure.

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Article 35

2. Reimbursement of benefits provided on the basis of fixed amounts

The Member States can elect to effect reimbursement on the basis of fixed 7 amounts (Art. 35 (1) 2nd alternative). Reimbursement on the basis of actual expenses is not possible or difficult where health insurance schemes with a national or communal health service are concerned (Art. 63 (1) implementing Regulation). Basically reimbursement on the basis of fixed amounts is possible for Ireland, Spain, Italy, Malta, the Netherlands, Portugal, Finland, Sweden and the UK (Annex 3 Reg. No. 987/2009). The Member State that has provided the benefits charges the fixed amount re- 8 gardless of which individual benefits were actually provided. There must only be a “claim event”. The fixed amounts are based on one month respectively (Art. 64 implementing Regulation, which includes details concerning the calculation). It is calculated on the basis of the annual average cost of treatment for all national claimants broken down by age group. Please see also paragraph 12 below for the reimbursement procedure. 3. Reimbursement of benefits provided on the basis of special agreements

Art. 35 (3) allows the Member States to agree between themselves contractual 9 deviants from the reimbursement regulations, such as the waiving of reimbursement. Art. 35 (3) is a special provision that includes a different regulation for the priority of agreements between the Member States, so that the agreements need not be listed in Annexes I and II of Reg. No. 883/2004. 4. Execution of the procedure

The Commission has enacted several “structured electronic documents” (No. 10 S080 (CLA) to No. S103) for reimbursement processes and data exchange. In addition, with its Decision No. S9 from 29.06.2013 (OJ. C 279 from 27.9.2013, s. 8–10) the Administrative Commission has once again summarised the key principles for both types of reimbursement: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013D0927%2802%29&from=EN. General special provisions of Reg. No. 987/2009 Article 32 Reg. No. 987/2009 Special implementing measures (1) When a person or a group of persons are exempted upon request from compulsory sickness insurance and such persons are thus not covered by a sickness insurance scheme to which the basic Regulation applies, the institution of another Member State shall not, solely because of this exemption, become responsible for bearing the costs of benefits in kind or in cash provided to such persons or to a member of their family under Title III, Chapter I, of the basic Regulation. (2) For the Member States referred to in Annex 2, the provisions of Title III, Chapter I, of the basic Regulation relating to benefits in kind shall apply to persons entitled to benefits in kind solely on the basis of a special scheme for civil servants only to the extent specified therein. The institution of another Member State shall not, on those grounds alone, become responsible for bearing the costs of benefits in kind or in cash provided to those persons or to members of their family. (3) When the persons referred to in paragraphs 1 and 2 and the members of their families reside in a Member State where the right to receive benefits in kind is not subject to conditions of insurance, or of activity as an employed or self-employed person, they shall be liable to pay the full costs of benefits in kind provided in their country of residence.

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Art. 32 Reg. No. 987/2009 contains some new special provisions for the basic Regulation (3 c) No. 883/2004. 12 Paragraph 1 ensures that, persons not covered by a sickness insurance scheme in a Member State cannot, even on the basis of a stay in another country, claim benefits to be charged to an institution in a different Member State (than their Member State of residence or employment). However, the right to claim benefits can indeed be established pursuant to national legislation, especially in the case of residency. 13 Paragraph 2 in conjunction with Annex 2 exempts German civil servants completely and Spanish civil servants/public sector workers (here not however on the basis of Art. 19 (1) (benefits for a stay in a Member State other than the Member State of residence), Art. 27 (the same applicable to pensioners and their family members) and Art. 35 (reimbursement of costs)) from the system of coordinating health insurance legislation. 14 Paragraph 3 once again ensures that the principles laid down in paragraphs 1 and 2 apply especially in Member States that have a public health service. 11

Chapter 2 Benefits in respect of accidents at work and occupational diseases Bibliography: Fuchs, Accident at work and occupational diseases, in: European Journal of Social Security, 2009, No. 1-2, pp. 163-176; Kranig, Berufskrankheiten in Europa, DGUV Forum, 2012, p. 30 et seq.; Schimke, Reformbedürfnis der Lastenzuweisung bei der Entschädigung von Berufskrankheiten im europäisch koordinierenden Sozialrecht, 2002; Wölfle, Das Spannungsverhältnis zwischen dem Unfallversicherungsmonopol der gewerblichen Berufsgenossenschaften und dem Gemeinschaftsrecht, ZEuS 2009, p. 301 et seq.

Overview I. Function and tasks of the European Law concerning insurance against accident and occupational diseases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. The territorial orientation of accident insurance schemes . . . . . . . . . . . 2. Overcoming of territorial restriction by means of international social law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. The content of the provisions of Art. 36 to 41 . . . . . . . . . . . . . . . . . . . . . . . . a) Simplification by means of referral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Provision of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Equal treatment of facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Reimbursement between institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Compatibility of accident insurance monopolies with European Law . .

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1 1 2 3 3 5 7 8 9

Overview

I. Function and tasks of the European Law concerning insurance against accident and occupational diseases 1. The territorial orientation of accident insurance schemes

Similar to the situation with social insurance as a whole, there is also a ten- 1 dency in the individual countries where accident insurance law is concerned to grant compensation only for such accidents and occupational diseases that occur within their own territory. In compliance with German accident insurance law, for example, only cash benefits are provided abroad, but not benefits in kind. Such regulations are normally justified by citing the principle of territoriality. 2. Overcoming of territorial restriction by means of international social law

The rise in labour migration to other countries has led to the principle of terri- 2 toriality being increasingly questioned. The necessity of a cross-border regulation of accidents at work and occupational diseases has become irrefutable. For this reason coordination rules for benefits in respect of accidents at work and occupational diseases were already included in Reg. No. 3 (Art. 20-31). They are now the subject matter of Art. 36-41. 3. The content of the provisions of Art. 36 to 41 a) Simplification by means of referral

Former coordination legislation applied only to workers, self-employed per- 3 sons and students (cf. Art. 52, 63 (a), 95 (d) Reg. No. 1408/71). Art. 36 no longer includes any restrictions to specific groups of persons. In contrast to former legislation (cf. Art. 52 to 63 (a) Reg. No. 1408/71) the 4 Chapter accidents at work and occupational diseases has shrunk to just five provisions. This reduction of the provisions derives from the key concern of Reg. No. 883/2004, namely to achieve a simplification of coordination law (cf. introduction para. 16). The two decisive techniques used here are the referral of the coordination of accidents at work and occupational diseases to the provisions pertaining to sickness (Art. 36). In addition the creation of a general rule of equal treatment of benefits, income, facts in Art. 5 made it possible to dispense with the need of having numerous rules of equivalency (see c) below). b) Provision of benefits

One key task of coordination legislation where accidents at work and occupa- 5 tional diseases are concerned is to find a solution for such cases where the injured person or the person who has contracted a disease resides (or stays) in a Member State other than the Member State under whose legislation the accidents or occupational diseases are insured. Art. 36 (1) resolves this problem by referring this provision to the legislation concerning sickness benefits. Whereby a distinction is made between benefits in kind and cash benefits. For the latter Maximilian Fuchs

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Art. 36 (3) refers to Art. 21. The accident insurance law of the Member States is characterised by a benefit scheme that is more specialised than the general sickness benefit schemes, in that it is tailored to meet the needs of the victims of an accident and those who have contracted an occupational disease. Art. 36 (2) ensures that a person who has sustained an accident at work or contracted an occupational disease receives the special benefits in kind granted for accidents at work and occupational diseases in the Member State of residence or stay. Rights to transport costs are codified in Art. 37. Since not all Member States have special benefit schemes for accidents at work and occupational diseases, it was necessary to clarify responsibilities in these cases. This is effected in Art. 40 (1) (2). 6 Where occupational diseases are concerned, Art. 38, as was the case in former legislation (cf. Art. 57 (1) Reg. No. 1408/71), adheres to the principle that in the case of exposure in several Member States benefits shall be provided by the institution in the last of these States, provided such a right exists under its legislation. According to former legislation this distribution of competences was also coupled with the bearing of the costs. An exception was provided for in cases of sclerogenic pneumoconiosis prescribing sharing of the costs on a pro-rata-temporis basis (Art. 57 (5) Reg. No. 1408/71). The new legislation no longer adheres to this legal position. So the principle pursuant to Art. 38 of not only competence but also the cost burden remaining with the competent institution will continue to apply in future. The provisions concerning aggravation of an occupational disease in Art. 39 have been retained. c) Equal treatment of facts 7

Former coordination legislation concerning accidents at work and occupational diseases was characterised by numerous so-called rules of equivalency, i.e. provisions stipulating that the events and facts relevant for a claim occurring in another Member State shall be treated as if they had taken place in the territory of the competent Member State. Such special provisions in former legislation concerning accidents while travelling (Art. 56 Reg. No. 1408/71), residence of the members of the family (Art. 58 Abs. 3 Reg. No. 1408/71), consideration of accidents at work or occupational diseases that had occurred previously (Art. 61 (5) Reg. No. 1408/71), previous exposure periods (Art. 57 (2)(3) Reg. No. 1408/71) have become dispensable, because they are now included in the equal treatment rule of Art. 5. The provision concerning subsequent occurrence and confirmation of accidents at work has, however, been retained. This provision is now found in Art. 40 (3). d) Reimbursement between institutions

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Overview

II. Compatibility of accident insurance monopolies with European Law

In many Member States of the EU accident insurance has been placed under the exclusive competence of public institutions (cf. for Germany the provisions concerning employers’ liability insurance associations (Berufsgenossenschaften) in §§ 121 et seq. SGB VII; in France Art. L 200-2 Code de la sécurité sociale; in Italy Art. 12 Decree from 30 June 1965, n. 1124). This applies at least for basic protection in the case of accidents at work and occupational diseases. Supplementary cover of the risks by means of private insurance is not excluded. Nevertheless, the question has arisen as to whether such compulsory membership of companies with a public institution or – what is just another expression for the same – this monopoly position is compatible with the TFEU. This question first emerged in connection with the Italian accident insurance institution INAIL. An Italian court had submitted the question to the CJEU as to whether the Italian accident insurance monopoly was compatible with the provisions of the TFEU concerning competition (Art. 101 et seq. TFEU). The application of this provision requires that the INAIL is an undertaking within the meaning of Art. 101 TFEU. Referring directly to the principles developed in the Case Poucet and Pistre the CJEU negated the question (CJEU, Case C-218/00 (Cisal), EU:C:2002:36). Decisive was the fact that the Italian insurance institution adhered to a system characterised by the principle of solidarity. In other words, the contributions were not strictly proportional to the insured risk. Furthermore, the contributions were not calculated only on the basis of the risk involved in the activity of the respective undertaking, but also on the basis of the incomes of the insured persons. And a final key argument was that the amount of the benefits and contributions was in the last instance fixed by the state (for the importance of this argument cf. also CJEU, Case C-264/01 (AOK Bundesverband), EU:C:2004:150). Shortly after this the compulsory affiliation of undertakings in the German accident insurance scheme was considered questionable from the point of view of European legislation. A ruling was requested for this question from the CJEU in proceedings pending before a German Landessozialgericht. Again basing its arguments fully on the Cases Poucet and Pistre as well as Cisal the CJEU negated the undertaking character of the German Employers’ liability insurance associations (CJEU, Case C-350/07 (Kattner), EU:C:2009:127). However, the CJEU saw a restriction in the freedom to provide services in the compulsory affiliation, because it constitutes a restriction of the freedom of companies established in other Member States, who wish to offer contracts of insurance covering such risks in the Member State concerned, in that it hinders or renders less attractive, or even prevents, directly or indirectly, the exercise of that freedom (para. 82 of the judgement in the Case Kattner). At the same time the CJEU indicated that the compulsory affiliation could be justified objectively. Pursuant to the case law of the CJEU such a restriction may be justified where it reflects overriding requirements relating to the public interest, is suitable for securing the attainment Maximilian Fuchs

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of the objective which it pursues and does not go beyond what is necessary in order to attain it (cf. para. 84 of the judgement in the Case Kattner). Referring to its previous case law, the CJEU saw the risk of seriously undermining the financial equilibrium of the social security system as constituting an overriding reason in the public interest (cf. para. 85). And the Court indicates the reason why the existing system of the German insurance is a suitable means of ensuring the financial equilibrium of this branch of social security, in particular in that is does justice to the principle of solidarity. The CJEU left it up to the national court to regulate the necessary verification of proportionality. However, the CJEU had already indicated that it regards the fact that the German accident insurance scheme only offers minimum coverage as a factor militating in favour of its proportionality (para. 8, 81 and 89 of this judgement). 13 Even the hypothesis of the CJEU that compulsory affiliation constitutes a restriction of the freedom to provide services must be rejected (the Advocate General opposed this, cf. in this respect Fuchs, ZESAR 2009, 59). The judgement of the CJEU is not consistent with the earlier judgement in the Case Garcia (CJEU, Case C-238/94 (García), EU:C:1996:132) and the legislative stipulations regarding the exclusion of the field of social security from insurance harmonisation. Regardless of the above, the justification – as the CJEU itself indicated – for the protection of the financial equilibrium of the social security scheme is necessary. Already in the Case Poucet und Pistre and more explicitly in the Case Garcia the Court proclaimed: “Finally as the Court stressed in joint Cases C-159/91 and C-160/91 (Poucet and Pistre) para. 13, social security schemes such as those in issue in the main proceedings, which are based on the principle of solidarity, require compulsory contributions in order to ensure that the principle of solidarity is applied and that their financial equilibrium is maintained. If Art. 2(2) of Directive 92/49/EEC were to be interpreted in the manner contemplated by the national tribunal, the obligation to contribute would be removed and the schemes in question would thus be unable to survive.” (CJEU, Case C-238/94 (García), EU:C:1996:132 para. 14). As the employers’ liability insurance associations in Germany are organised on the principle of a pay-as-you-go system, this legal justification is applicable to the full.

Article 36 Right to benefits in kind and in cash (1) Without prejudice to any more favourable provisions in paragraph 2 and 2 a of this Article, Articles 17, 18(1), 19(1) and 20(1) shall also apply to benefits relating to accidents at work or occupational diseases. (2) A person who has sustained an accident at work or has contracted an occupational disease and who resides or stays in a Member State other than the competent Member State shall be entitled to the special benefits in kind of the scheme covering accidents at work and occupational diseases provided, on behalf of the competent institution, by the

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Article 36 institution of the place of residence or stay in accordance with the legislation which it applies, as though he/she were insured under the said legislation. (2 a) The competent institution may not refuse to grant the authorisation provided for in Article 20(1) to a person who has sustained an accident at work or who has contracted an occupational disease and who is entitled to benefits chargeable to that institution, where the treatment appropriate to his/her condition cannot be given in the Member State in which he/she resides within a time-limit which is medically justifiable, taking into account his/her current state of health and the probable course of the illness. (3) Article 21 shall also apply to benefits falling within this Chapter. Article 33 Reg. No. 987/2009 Right to benefits in kind and in cash in the event of residence or stay in a Member State other than the competent Member (1) For the purposes of the application of Article 36 of the basic Regulation, the procedures laid down in Articles 24 to 27 of the implementing Regulation shall apply mutatis mutandis. (2) When providing special benefits in kind in connection with accidents at work and occupational diseases under the national legislation of the Member State of stay or residence, the institution of that Member State shall without delay inform the competent institution. Article 34 Reg. No. 987/2009 Procedure in respect of accidents at work or occupational disease which occurs in a Member State other than the competent Member State (1) If an accident at work occurs or an occupational disease is diagnosed for the first time in a Member State other than the competent Member State, the declaration or notification of the accident at work or the occupational disease, where the declaration or notification exists under national legislation, shall be carried out in accordance with the legislation of the competent Member State, without prejudice, where appropriate, to any other applicable legal provisions in force in the Member State in which the accident at work occurred or in which the first medical diagnosis of the occupational disease was made, which remain applicable in such cases. The declaration or notification shall be addressed to the competent institution. (2) The institution of the Member State in the territory of which the accident at work occurred or in which the occupational disease was first diagnosed, shall notify the competent institution of medical certificates drawn up in the territory of that Member State. (3) Where, as a result of an accident while travelling to or from work which occurs in the territory of a Member State other than the competent Member State, an inquiry is necessary in the territory of the first Member State in order to determine any entitlement to relevant benefits, a person may be appointed for that purpose by the competent institution, which shall inform the authorities of that Member State. The institutions shall cooperate with each other in order to assess all relevant information and to consult the reports and any other documents relating to the accident. (4) Following treatment, a detailed report accompanied by medical certificates relating to the permanent consequences of the accident or disease, in particular the injured person’s present state and the recovery or stabilisation of injuries, shall be sent upon request of the competent institution. The relevant fees shall be paid by the institution of the place of residence or of stay, where appropriate, at the rate applied by that institution to the charge of the competent institution. (5) At the request of the institution of the place of residence or stay, where appropriate, the competent institution shall notify it of the decision setting the date for the recovery or stabilisation of injuries and, where appropriate, the decision concerning the granting of a pension. Article 35 Reg. No. 987/2009 Disputes concerning the occupational nature of the accident or disease (1) Where the competent institution disputes the application of the legislation relating to accidents at work or occupational diseases under Article 36(2) of the basic Regulation, it shall without delay inform the institution of the place of residence or stay which provided the benefits in kind, which will then be considered as sickness insurance benefits. (2) When a final decision has been taken on that subject, the competent institution shall without delay inform the institution of the place of residence or stay which provided the benefits in kind. Where an accident at work or occupational disease is not established, benefits in kind shall continue to be provided as sickness benefits if the person concerned is entitled to them. Where an accident at work or occupational disease is established, sickness benefits in kind provided to the person concerned shall be considered as accident at work or occupational disease benefits from the date on which the accident at work occurred or the occupational disease was first medically diagnosed. (3) The second subparagraph of Article 6(5) of the implementing Regulation shall apply mutatis mutandis.

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Part 2: Regulation (EC) No 883/2004 Article 40 Reg. No. 987/2009 Submission and investigation of claims for pensions or supplementary allowances In order to receive a pension or supplementary allowance under the legislation of a Member State, the person concerned or his survivors residing in the territory of another Member State shall submit, where appropriate, a claim either to the competent institution or to the institution of the place of residence, which shall send it to the competent institution. The claim shall contain the information required under the legislation applied by the competent institution. Article 41 Reg. No. 883/2004 Special implementing measures (1) In relation to the Member States referred to in Annex 2, the provisions of Title III, Chapter 2 of the basic Regulation relating to benefits in kind shall apply to persons entitled to benefits in kind solely on the basis of a special scheme for civil servants, and only to the extent specified therein. (2) Article 32(2) second subparagraph and Article 32(3) of the implementing Regulation shall apply mutatis mutandis.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Differences between the competent State and the State of residence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Stay in the territory of the competent State . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Stay outside of the competent Member State . . . . . . . . . . . . . . . . . . . . . . . . . 4. Treatment in another Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) The case law of the CJEU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Dual character of the right to treatment in another Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Applicability of benefits in respect of accidents at work and occupational diseases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Conditions for authorisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose

The spirit and purpose of Art. 36 can only be understood in view of the earlier provisions in Articles 52 to 55 and Art. 58 Reg. No. 1408/71. These provisions regulated such cases that were characterised by the fact the place of residence or stay of the worker or employed person was not in the territory of the State competent for providing the benefit. These provisions went into great detail as to which institutions were obliged to provide benefits, distinguishing here between benefits in kind and in cash for the respective case constellation. 2 These detailed provisions were made despite there already being similar provisions for the areas of sickness and maternity (cf. Art. 19 et seq. Reg. No. 1408/71). In view of the objective of simplifying the rules pursued in the drawing up of Reg. No. 883/2004, the European legislator benefitted from the parallelism of the provisions and codified the legislative competences and those of provision in the case of benefits for accidents at work and occupational diseases by referral to the corresponding provisions in the area of sickness benefits. This has resulted in a significant reduction in the previous provisions. In as far as nothing particular is regulated in Art. 36 (2) (2 a), the corresponding provisions concerning sickness benefits apply in compliance with Art. 36 (1). Art. 36 (3) provides that Art. 21 shall apply accordingly for cash benefits. 1

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II. Commentary 1. Differences between the competent State and the State of residence

According to the definition in Art (1)(s) the competent Member State is the 3 Member State in which the competent institution is situated. Art. 1 (q)(i) defines the competent institution as the institution with which the person concerned is insured at the time of the application for benefit. So in compliance with the conflict of law rules the competent institution for benefits in respect of accidents at work and occupational diseases must be identified from Art. 11 et seq. According to Art. 1(r) the institution of the place of residence is the institution competent to provide benefits in the place where the person concerned resides in accordance with the legislation administered by that institution. Art. 36 refers to the provisions of Art. 17 in the event the place of residence 4 and the competent Member State are not one and the same. Art. 17 provides for benefits in kind that these shall be provided by the institution of the place of residence in accordance with the provisions of the legislation it applies on behalf of and at the expense of the competent institution. This ensures that the injured or sick person receives the necessary help on the spot. In contrast to the provisions of Reg. No. 1408/71 (cf. Art. 52, 63 (a), 95 (d) there), Art. 36 does not limit the scope of accident insurance coordination legislation to certain groups of persons. Decisive here is whether the injured or sick person is insured against accidents in compliance with the relevant legislation pursuant to the provisions of Art. 11 cf. The term benefits in kind is defined in Art. 1 (va) (ii) in conjunction with (va) i). The term thus includes all benefits in kind in connection with accidents at work and occupational diseases pursuant to the definition in (va)(i), that are provided for under the provisions for accidents at work and occupational diseases of the Member States. According to the definition of (va)(i) referred to and that is intended for sickness benefits, benefits in kind are those benefits which are intended to supply, make available, pay directly, reimburse the cost of medical care and products and services ancillary to that care. Pursuant to s. 2 this provision also includes long-term care benefits in kind. It must be noted that in its rulings the CJEU classified German care allowance as a sickness benefit (CJEU, Case C-160/96 (Molenaar), EU:C:1998:84 para. 30 et seq.; affirmed by Case C-215/99 (Jauch), EU:C:2001:139; Case C-502/01 (Gaumain-Cerri), EU:C: 2004:413). This legal opinion must therefore also be taken as the basis for the classification of care allowance in accident insurance. According to the definition in Art. 1 (r) the institution of the place of resi- 5 dence is the institution competent to provide benefits in the place where the person concerned resides in accordance with the legislation administered by that regulation. Pursuant to Art. (q)(i) the competent institution is the institution with which the person concerned is insured at the time of the application for benefit, i.e. specifically insured against accidents. The Member State this concerns here is determined in accordance with the conflict of law rules in Art. 11 et seq. If Maximilian Fuchs

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accident insurance is not provided for in the Member State of the place of residence, then pursuant to Art. 40 (1) these benefits are provided by the institution of the place of residence competent for the providing of benefits in kind in respect of sickness. The institution of the place of residence shall provide benefits in kind on behalf of another institution in accordance to the legislation it applies. The administrative processing of the claim for benefits requires an exchange of information between the institution of the place of residence and the competent bodies of the competent Member State. In particular the right to a claim must be clarified within this framework. For the area of accident insurance Art. 33 Reg. No. 987/2009 provides that Art. 24 Reg. No. 987/2009 is applicable mutatis mutandis. Pursuant to Art. 24 (1) Reg. No. 987/2009 the right to benefits in kind shall be certified by a document issued by the competent institution upon request of the insured person or upon request of the institution of the place of residence. Art. 34 Reg. No. 987/2009 contains further details for administrative processing. Please see Art. 3 para. 52 for the exclusion of the right to benefits in kind for civil servants. With regard to the range of benefits in kind Art. 36 (2) includes a special provision. This provides that a person who has sustained an accident at work or has contracted an occupational disease is entitled to the special benefits in kind of the scheme covering accidents at work and occupational diseases provided, on the behalf of the competent institution, by the institution of the place of residence in accordance with the legislation it applies. Most Member States have special benefits in kind for this group of persons that often greatly exceed those provided for under the national health insurance scheme. It is the declared intention of the legislature that this range of benefits is also made available in the Member State of residence. An accident while travelling that occurs in the territory of a Member State other than the competent State shall be deemed as having occurred in the competent State. This legal consequence was formerly regulated explicitly (cf. Art. 56 Reg. No. 1408/71). It now arises from Art. 5. Art. 34 (3) Reg. No. 987/2009 is applicable with regard to compensation for accidents while travelling. Competence for benefits pursuant to Art. 17 is of a conclusive nature. There are no longer any special provisions for frontier workers (in contrast to former Art. 53 Reg. No. 1408/71). The procedure prescribed in Art. 35 Reg. No. 987/2009 must be followed in the event of disputes concerning the occupational character of an accident or disease. With regard to the provision of cash benefits Art 36 (3) refers to Art. 21. Pursuant to Art. 21 (1)(1) cash benefits are provided by the competent institution in accordance with the legislation it applies. Where the legal procedures for clarifying a multitude of questions about deciding on a right are concerned Art. 27 Reg. No. 987/2009 is applicable, to which Art. 33 (1) Reg. No. 987/2009 also refers

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for the area of accident insurance. Pursuant to Art. 21 (1) (2) cash benefits can also be provided by the institution of the place of residence in accordance with the legislation applied by the competent Member State and at its expense if an appropriate agreement is made between the competent institution and the institution of the place of residence. No reference is made in Art. 36 to the provisions for long-term care benefits in cash in Art. 34. However, this overlapping benefit provision is also applicable analogously for accident insurance, because Art. 36 (3) refers to Art. 21 to which Art. 34 (1) is linked. In most Member States the amount of cash benefits is dependent on the previ- 11 ously earned wage or salary. Pursuant to former legislation Art. 58 (1)(2) Reg. No. 1408/71 included rules for calculating wages and salaries. No substantive changes have been made in this respect in Reg. No. 883/2004 where the contents of the provisions in Art. 21 (2)(3) are identical. Art. 21 (2) states that the competent institution of a Member State whose legislation stipulates that the calculation of cash benefits shall be based on an average income basis shall determine such average income exclusively by reference to the incomes confirmed as having been paid during the periods completed under the said legislation. In the Case Nemec the CJEU demanded a teleological interpretation of the identical Art. 58 (1) Reg. No. 1408/71, i.e. that it should be interpreted in the light of the purpose of Art. 48 TFEU (CJEU, Case C-205/05 (Nemec), EU:C:2006:705). It pointed out that the protected freedom of movement of workers in Art. 48 TFEU entails that migrant workers must not lose their right to social security benefits or have the amount of those benefits reduced because they have exercised the right of freedom of movement conferred on them by the TFEU. The Court points out that a national legislation that only wishes to take the average income that was earned in its territory into account would put migrant workers at a disadvantage as compared with workers who have worked in only one Member State. This was the case here, because in compliance with French legislation the income in France was earned many years ago, while the income last earned in Belgium was much higher but according to French regulations could not be taken into account. The CJEU did not require that Art. 58 (1) Reg. No. 1408/71 (identical in content with Art. 21 (2)) be deemed incompatible with Art. 48 TFEU. However, Art. 48 TFEU demands that said benefits must be the same for migrant workers as they would have been if they had not availed themselves of the right to freedom of movement. In this specific case the Court therefore demanded that the amount of the pay earned in the Member State in which the competent institution (i.e. France) is situated must be updated and revalorised so as to correspond to the pay the person concerned might reasonably have been able to earn had he/she continued to work in the Member State in question. In compliance with national legislation the amount of the cash benefits can 12 depend on the existence and number of the members of the family (see Art. 1(i) for this term). In this respect Art. 58 (3) Reg. No. 1408/71 decrees that the competent institution shall also take into account the members of the family of the Maximilian Fuchs

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insured person who are residing in another Member State as if they were residing in the territory of the competent State. This legal consequence now arises from Art. 5. 2. Stay in the territory of the competent State 13

If the State of residence and the competent State are different and if the insured person stays in the competent Member State, then he/she is entitled to benefits in kind from the competent institution in accordance with the legislation it applies as though the insured person resided in that Member State (Art. 36 (1) in conjunction with Art. 18 (1). This competence for rights and benefits formerly arose from Art. 54 (1) Reg. No. 1408/71. Stay according to the definition in Art. 1 (k) is the temporary residence. 3. Stay outside of the competent Member State

Art. 36 (1) refers to the provisions of Art. 19 (1) in the case of the competent State and the State of residence being different. Such a case is of fundamental importance in practice as it concerns in particular a posting abroad (Art. 12) where an accident at work occurs during the posting. In such a case Art. 19 (1) determines the institution of the place of stay as being competent for providing benefits in kind. However, by way of derogation from Art. 19 (1) the special provision of Art. 36 (2) concerning the extent of the benefit shall apply. Namely that in respect of accidents at work and occupational diseases the person concerned is entitled to the special benefits in kind to be provided by the institution of the place of stay in accordance with the legislation it applies. With regard to these special provisions, what was said in para.1 applies for such cases. Art. 25 Reg. No. 987/2009 to which Art. 33 (1) Reg. No. 987/2009 refers is of importance where the relevant procedures are concerned. The institution of the place of residence shall inform the competent institution without delay of the granting of special benefits resulting from an accident at work or an occupational disease (Art. 33 (2) Reg. No. 987/2009). For the rest Art. 34 and 35 Reg. No. 987/2009 are applicable. 15 In accordance with Art. 36 (3) the provisions of Art. 21 are applicable for cash benefits (see in this respect para. 10 above). 14

4. Treatment in another Member State 16

Art. 36 (1) refers to the provision of Art. 20 (1) for such cases where an insured person who has sustained an accident at work or contracted an occupational disease wishes to travel to another Member State for the purpose of receiving benefits in kind there. Art. 20 (1) provides that in such a case the insured person must seek authorisation from the competent institution. This has resulted in a case constellation and legal consequences that have given rise to the most controversies in recent times. The background of these controversies is the case law

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of the CJEU concerning the receipt of health care benefits in other European States. a) The case law of the CJEU

The following is intended to reproduce the key principles of CJEU case law 17 introduced in the judgements in the Cases Decker (CJEU, Case C-120/95, EU:C: 1998:167) and Kohll (CJEU, Case C-158/96, EU:C:1998:171) (see the Preamble to Art. 17 para. 14 et seq. above for a more detailed treatment of these judgements). These principles, developed in the area of sickness benefits, also apply analogously to benefits in respect of accidents at work and occupational diseases. Based on the aforementioned judgements outpatient health care treatment in other Member States of the EU do not require prior authorisation by the institutions of the competent Member State. Should such an authorisation requirement exist under national law, this constitutes a prohibited restriction on the freedom to provide services (Art. 56 et seq. TFEU). This applies both to schemes whose organisation is based on the principle of reimbursement of costs and such that adhere to the benefit in kind principle (CJEU, Case C-385/99 (Müller-Fauré), EU:C:2003:270 para. 106). In contrast to outpatient treatment the CJEU regarded the authorisation requirement for inpatient treatment abroad as compatible with the right of freedom to provide services (CJEU, Case C-157/99 (Smits-Peerbooms), EU:C:2001:404). The CJEU also affirmed the applicability of its case law for such national schemes that – like the British scheme – have a national health service that provides health care benefits free of charge for its citizens (CJEU, Case C-372/04 (Watts), EU:C:2006:325). If authorisation for inpatient treatment is fundamentally permissible, then strict requirements must be applied to the conditions on which the authorisation is granted with regard to the right of freedom to provide services. In the aforementioned Case Smits-Peerbooms (cf. para. 87-98 of the judgement) the CJEU stressed in this respect that a scheme of prior authorisation cannot legitimise discretionary decisions taken by the national authorities which are liable to negate the effectiveness of the fundamental freedom. The authorisation must therefore be based on objective, non-discriminatory criteria which are known in advance, in such a way as to circumscribe the exercise of the national authorities' discretion, so that it is not used arbitrarily. In addition such an authorisation system must be based on a procedural system which is easily accessible and capable of ensuring that a request for authorisation will be dealt with objectively and impartially and refusals to grant authorisation must also be capable of being challenged in judicial proceeding. In the Case Watts the CJEU specified more precisely (para. 119 of the judgement), that a refusal to grant prior authorisation cannot be based merely on the existence of waiting lists enabling the supply of hospital care to be planned and managed on the basis of predetermined general clinical priorities, without carrying out in the individual case in question an objective medical assessment of the patient’s medical condition, the history and probable course of Maximilian Fuchs

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his illness, the degree of pain he is in and/or the nature of his disability at the time when the request for authorisation was made or renewed. If it follows that the delay arising from such waiting lists appears to exceed in the individual case concerned an acceptable period having regard to an objective medical assessment of all the circumstances of the situation and the clinical needs of the person concerned, the competent institution may not refuse the authorisation sought on the grounds of the existence of those waiting lists (para. 120 of the judgement). 18 Insured persons who travel without prior authorisation to a Member State other than the one in which their sickness fund is established to receive treatment there can claim reimbursement of the cost of the treatment received only within the limits of the cover provided by the sickness insurance scheme of the Member State of affiliation. Likewise, the conditions on which benefits are granted, in so far as they are neither discriminatory nor an obstacle to freedom of movement of persons, remain enforceable where treatment is provided in a Member State other than that of affiliation. And nothing precludes a competent Member State with a benefits in kind system from fixing the amounts of reimbursement which patients who have received care in another Member State can claim, provided that those amounts are based on objective, non-discriminatory and transparent criteria (CJEU, Case C-385/99 (Müller-Fauré), EU:C:2003:270 para. 106 et seq.). 19 If refusal of the authorisation pursuant to para. 1(c) by the competent institution was unfounded and if the insured person travels to the territory of another Member State for treatment, then that person is entitled to be reimbursed directly by the competent institution by an amount equivalent to that which it would ordinarily have borne if authorisation had been properly granted in the first place (CJEU, Case C-368/98 (Vanbraekel), EU:C:2001:400 para. 34). The CJEU stressed in this judgement that Article 20 is not intended to regulate, and therefore does not in any way prevent, reimbursement by Member States at the tariffs in force in the competent State, of costs incurred in connection with treatment provided in another Member State where the legislation of the Member State in which the person concerned is insured makes provision for such reimbursement and the tariffs applied under that legislation are more beneficial than those applied by the Member State in which the treatment was provided (para. 36 of the judgement). Although Art. 20 does not prevent such reimbursement, it does not require it, either. But with regard to the freedom to provide services the CJEU does require that if refusal was unfounded, then the person concerned is entitled to be reimbursed directly by the competent institution by an amount equivalent to that which it would ordinarily have borne if authorisation had been properly granted in the first place. Art. 56 TFEU is to be interpreted as meaning that, if the reimbursement of costs incurred in the Member State of stay is less than the amount which application of the legislation in force in the Member State of registration would afford to a person receiving hospital treatment in that State, additional reimbursement covering that difference must be granted to the insured

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person by the competent institution (para. 53 of the judgement). This case law must be rejected, cf. Art. 19 para. 28 above in this respect. Where health care benefits are concerned Art. 25 (8) Reg. No. 987/2009 now states that reimbursement to the insured person shall not, in any event, exceed the amount of costs actually incurred by him/her. This provision must apply analogously to benefits in respect of accidents at work and occupational diseases. b) Dual character of the right to treatment in another Member State

The case law of the CJEU has led directly to a two-track system of rights. The 20 person concerned can derive his/her right to treatment from the freedom to provide services. But the right can also be based on Art. 20. Both rights are not mutually exclusive, instead they exist side-by-side. The CJEU has clarified this point explicitly (cf. CJEU, Case C-372/04 (Watts), EU:C:2006:325 para. 48). c) Applicability of benefits in respect of accidents at work and occupational diseases

The principles developed by the CJEU with regard to sickness benefits must 21 also be applied to benefits in respect of accidents at work and occupational diseases. This means that in addition to the right arising from Art. 36 (1) in reference to Art. 20 (1), a person who has sustained an accident at work or who has contracted an occupational disease has a right to health care treatment in another Member State arising directly from Art. 56 et seq. TFEU or rather Art. 34 TFEU, provided this concerns medical treatment and the procurement of medicines, remedies and adjuvants. d) Conditions for authorisation

The legislator has specified the conditions for the authorisation that is pre- 22 scribed by Art. 20 (1) for treatment in another Member State. Namely, that the claimant has a right to the authorisation if he/she cannot be given the treatment appropriate to his/her condition in the Member State of residence within a time limit which is medically justifiable taking into account his/her current state of health and the probable course of the disease (Art. 36 (2 a)). This provision pursues the intention of the CJEU which drew it up in regard to the fundamentally permissible authorisation in the case of inpatient treatment with a view to respecting the freedom to provide services. The wording of para. 2 a was amended by Reg. No. 465/2012, in that the restriction of the facts to employed persons or self-employed persons was revoked. Instead the addressee of an authorisation or a refused authorisation can be anyone regardless of their professional status. Because in compliance with the legislation of the Member States persons who have sustained an accident at work or who have contracted an occupational disease need not necessarily be employed persons or self-employed persons. The Member States often subject very different groups of persons to the protection of accident insurance. Maximilian Fuchs

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In future accident insurance will also have to take into account Directive 2011/24/EU on the application of patients’ rights in cross-border healthcare dated 9.3.2011 (OJ L 88/45) (cf. Hernekamp/Jäger-Lindemann, ZESAR 2011, 403 et seq. for the contents of Directive 2011/24/EU).

Article 37 Costs of transport (1) The competent institution of a Member State whose legislation provides for meeting the costs of transporting a person who has sustained an accident at work or is suffering from an occupational disease, either to his/her place of residence or to a hospital, shall meet such costs to the corresponding place in another Member State where the person resides, provided that that institution gives prior authorisation for such transport, duly taking into account the reasons justifying it. Such authorisation shall not be required in the case of a frontier worker. (2) The competent institution of a Member State whose legislation provides for meeting the costs of transporting the body of a person killed in an accident at work to the place of burial shall, in accordance with the legislation it applies, meet such costs to the corresponding place in another Member State where the person was residing at the time of the accident. 1

Para. 1 regulates the costs of transport of a person who has sustained an accident at work or is suffering from an occupational disease to either to his/her place of residence or to a hospital in the territory of the State where the injured/ sick person actually resides. The condition for this is that the legislation of the State in which the person is insured provides for transport to the place of residence or a hospital. If this is the case, para. 1 also requires payment of the costs of transport to the Member State of residence. However, this obligation arises only if the competent institution has given prior authorisation for the transport. Para. 1 requires the due taking into account of the reasons justifying it. Principles of economy alone shall not be decisive. In compliance with para. 1(2) such authorisation is not required for migrant workers (Art. 1(f)). The cost burden is to be borne by the competent institution, i.e. the institution of the Member State under whose legislation the injured person is insured (Art. 1 (q) (i)). National legislation often provides for the provision of the costs for transporting the body of the person killed to the place of burial. For this reason para. 2 extends this obligation of para. 1 in such a way that it meets the costs for transferring the body of the person killed to the place of burial in the country where the person was residing at the time of the accident. The place of burial and the place of residence of the person killed need not be the same. If, for example, a person residing in Strasbourg and insured under German law in Kehl is killed as the result of an accident and is buried in Bordeaux, then the German institution must bear the costs of the transport of the person killed to Bordeaux.

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Article 38 Benefits for an occupational disease where the person suffering from such a disease has been exposed to the same risk in several Member States When a person who has contracted an occupational disease has, under the legislation of two or more Member States, pursued an activity which by its nature is likely to cause the said disease, the benefits that he/she or his/her survivors may claim shall be provided exclusively under the legislation of the last of those States whose conditions are satisfied. Article 36 Reg. No. 987/2009 Procedure in the event of exposure to the risk of an occupational disease in more than one Member State (1) In the case referred to in Article 38 of the basic Regulation, the declaration or notification of the occupational disease shall be sent to the competent institution for occupational diseases of the last Member State under the legislation of which the person concerned pursued an activity likely to cause that disease. When the institution to which the declaration or notification was sent establishes that an activity likely to cause the occupational disease in question was last pursued under the legislation of another Member State, it shall send the declaration or notification and all accompanying certificates to the equivalent institution in that Member State. (2) Where the institution of the last Member State under the legislation of which the person concerned pursued an activity likely to cause the occupational disease in question establishes that the person concerned or his survivors do not meet the requirements of that legislation, inter alia, because the person concerned had never pursued in that Member State an activity which caused the occupational disease or because that Member State does not recognise the occupational nature of the disease, that institution shall forward without delay the declaration or notification and all accompanying certificates, including the findings and reports of medical examinations performed by the first institution to the institution of the previous Member State under the legislation of which the person concerned pursued an activity likely to cause the occupational disease in question. (3) Where appropriate, the institutions shall reiterate the procedure set out in paragraph 2 going back as far as the equivalent institution in the Member State under whose legislation the person concerned first pursued an activity likely to cause the occupational disease in question. Article 37 Reg. No. 987/2009 Exchange of information between the institutions and advance payments in the event of an appeal against a rejection (1) In the event of an appeal against a decision to refuse benefits taken by the institution of one of the Member States under the legislation of which the person concerned pursued an activity likely to cause the occupational disease in question, that institution shall inform the institution to which the declaration or notification was sent, in accordance with the procedure provided for in Article 36(2) of the implementing Regulation, and shall subsequently inform it when a final decision is reached. (2) Where a person is entitled to benefits under the legislation applied by the institution to which the declaration or notification was sent, that institution shall make the advance payments, the amount of which shall be determined, where appropriate, after consulting the institution which made the decision against which the appeal was lodged, and in such a way that overpayments are avoided. The latter institution shall reimburse the advance payments made if, as a result of the appeal, it is obliged to provide those benefits. That amount will then be deducted from the benefits due to the person concerned, in accordance with the procedure provided for in Articles 72 and 73 of the implementing Regulation. (3) The second subparagraph of Article 6(5) of the implementing Regulation shall apply mutatis mutandis.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Competent institution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Applicable legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Diagnosis of the occupational disease in another Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Consideration of exposure periods abroad . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose 1

In contrast to an accident at work whose occurrence can be localised with regard to time and place, an occupational disease is the result of a development process stretching over a longer period of time (exposure). The periods of exposure can have been in different Member States. Coordination of compensation for occupational diseases is necessary in order to ensure that the person concerned is put at no disadvantage due to his/her activity in different Member States. There are three key problems to be addressed in this respect: – Who is responsible for deciding on the benefit? (conflict of laws problem) – Must relevant events in other Member States also be taken into account when deciding on a benefit? – Who is liable for the costs if the exposure periods are in several Member States?

The question of the conflict of laws is decided by Art. 38, which provides that the institution under whose legislation the last right to the benefit was satisfied is the institution responsible for making the decision. Coordination law has therefore selected a solution whereby the institution of the State where the last dangerous activity was pursued is specified as having exclusive responsibility, provided the conditions for the compensation are satisfied. This provision fulfils two functions. Firstly, it is a conflict of laws rule, because it specifies which national accident insurance institution among those in question is appointed to make the decision. Secondly, it is an overlapping provision. So double provision of benefits is to be prevented. In the event the institution competent in compliance with Art. 38 decides that according to its provisions there is no right to compensation, the responsibility of the remaining insurance institutions concerned arises in reverse order. 3 Shifting the exclusive responsibility to the accident insurance institution of the place of the last dangerous activity does not allow that facts or events occurred in other Member States and relevant for occupational disease legislation remain unaccounted for. For this reason Art. 57 (2 to 5) Reg. No. 1408/71 provided for a series of rules of equivalence, enabling facts or events that arise in other Member States to be taken into account. With one exception Reg. No. 883/2004 no longer includes these rules of equivalence. The general rules of equivalence in Art. 5 and 6 rendered them no longer necessary. The rule of equivalence to date included in Art. 61 (6) Reg. No. 1408/71 has been retained. It is now to be found in Art. 40 (3). 4 The exclusive competence of just one institution for the granting of the benefit does not mean that this institution has to bear the complete cost burden for compensation in respect of occupational diseases. Most social security conventions in fact stipulate that a pro rata mechanism is to be applied in the event the cause of the occupational disease lies in several Member States. In other words taking the complete duration of the exposure as a basis each institution is com2

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petent for the benefit only for the period of exposure in its territory. Reg. No. 883/2004 does not adhere to this solution model. In accordance with the new legislation the cost burden is exclusively placed on the competent institution.This is in derogation of what was provided for in Art. 57 (5)(6) Reg. No. 1408/71. II. Commentary 1. Competent institution

Competent for the decision concerning the granting of compensation in re- 5 spect of occupational diseases is the institution of that Member State under whose legislation the conditions for an occupational disease are satisfied. In order to enable a decision of the then competent institution Art. 36 Reg. No. 987/2009 has provided for specific procedural obligations of possibly concerned institutions. 2. Applicable legislation

Whether or not compensation in respect of an occupational disease is to be 6 granted is decided on principle by the competent institution in accordance with its own national legislation. The relevant facts or events upon which the decision is then to made must, in accordance with Art. 5 or 6, also be taken into account even if they exist or occur in another Member State. In addition the provision of Art. 40 (3) is applicable. The Commission has made several recommendations to the Member States 7 concerning acceptance of a European list of occupational diseases (cf. last recommendation 2003/670/EG from 19.9.2003, OJ (EU) L 238/28). These recommendations do not constitute immediately applicable law in the Member States (Art. 288 TFEU). So they do not confer on individuals rights upon which they may rely before national courts. This has also been determined by the CJEU (cf. CJEU, Case 322/88 (Grimaldi), EU:C:1989:646). However, the CJEU has at the same time stressed that these recommendations may not be regarded as having no legal effect. The national courts are in fact bound to take recommendations into consideration in order to decide disputes submitted to them, in particular where they cast a light on the interpretation of national measures adopted in order to implement them or where they are designed to supplement binding Community provisions. a) Diagnosis of the occupational disease in another Member State

In as far as national occupational disease legislation requires for the right that 8 the disease concerned is first medically diagnosed within its own territory, then, according to Art. 5 (b) a diagnosis made in another Member State must also serve to fulfil this condition. It is debatable whether the competent institution is

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bound by a diagnosis of the occupational disease made by the institutions of other Member States. The CJEU has decided that the diagnosis of an occupational disease must be recognised by that Member State that is to provide benefits in compliance with Art. 38, even if the diagnosis was made in another Member State pursuant to that State’s legislation (CJEU, Case 28/85 (Deghillage), EU:C: 1986:113). The same applies where diagnosis of a disease as an occupational disease within a specific time limit after cessation of the last activity that is likely to cause that disease is concerned (until now this requirement was included in Art. 57 (3) Reg. No. 1408/71). b) Consideration of exposure periods abroad 9

The former provision of Art. 57 (4) Reg. No. 1408/71 provided for the principle that all exposure periods in all Member States must be considered as a whole. This also realised the principle of aggregation embodied in Art. 48 (a) TFEU. Reg. No. 883/2004 has made no change to this legal necessity. The legal necessity of taking exposure times in other Member States into consideration can now be derived from Art. 6.

Article 39 Aggravation of an occupational disease In the event of aggravation of an occupational disease for which a person suffering from such a disease has received or is receiving benefits under the legislation of a Member State, the following rules shall apply: a) if the person concerned, while in receipt of benefits, has not pursued, under the legislation of another Member State, an activity as an employed or self-employed person likely to cause or aggravate the disease in question, the competent institution of the first Member State shall bear the cost of the benefits under the provisions of the legislation which it applies, taking into account the aggravation; b) if the person concerned, while in receipt of benefits, has pursued such an activity under the legislation of another Member State, the competent institution of the first Member State shall bear the cost of the benefits under the legislation it applies without taking the aggravation into account. The competent institution of the second Member State shall grant a supplement to the person concerned, the amount of which shall be equal to the difference between the amount of benefits due after the aggravation and the amount which would have been due prior to the aggravation under the legislation it applies, if the disease in question had occurred under the legislation of that Member State; c) the rules concerning reduction, suspension or withdrawal laid down by the legislation of a Member State shall not be invoked against persons receiving benefits provided by institutions of two Member States in accordance with subparagraph (b). Article 38 Reg. No. 987/2009 Aggravation of an occupational disease In the cases covered by Article 39 of the basic Regulation, the claimant must provide the institution in the Member State from which he is claiming entitlement to benefits with details concerning benefits previously granted for the occupational disease in question. That institution may contact any other previously competent institution in order to obtain the information it considers necessary.

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Article 39 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Basic competence of the original institution providing the benefits (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Competence in case of continued pursuit of a dangerous activity (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Non-applicability of national prohibitions of cumulation (c) . . . . . . .

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I. Spirit and Purpose

Art. 39 concerns the case of provision of benefits in the event of an aggrava- 1 tion of an occupational disease for which benefits are already provided. The provision provides for a differentiated regulation, depending on the type of the disease and the cause of the aggravation. II. Commentary 1. Basic competence of the original institution providing the benefits (a)

If the condition of the person concerned has worsened and if the person con- 2 cerned has not pursued, under the legislation of another Member State, an activity likely to cause or aggravate the disease, then pursuant to (a) the competence remains basically with the institution competent for the first provision of the benefit. This institution also has to provide the benefits arising from the aggravation. 2. Competence in case of continued pursuit of a dangerous activity (b)

In the event the recipient of the benefit has taken up an activity likely to cause 3 such as disease or to aggravate it in another Member State after the benefit has been provided, competence remains with the former institution providing the benefits. In compliance with (b) this institution does not, however, take the aggravation into account, but continues to provide the benefit to its former extent. An abstract approach is to be assumed, not a concrete one, where the question of whether an activity was in fact likely to cause or aggravate the disease. Pursuant to sentence 2 the competent institution of the second Member State 4 is obliged to pay the person concerned a supplement. The amount of the supplement shall be equal to the difference between the amount of benefits due after the aggravation and the amount which would have been due prior to the aggravation under the legislation it applies, if the disease in question had occurred under the legislation of that (second) Member State. If no right to a supplement results from these provisions, the person concerned has no right with regard to the aggravation. Art. 38 Reg. No. 987/2009 is of importance where the relevant procedures are concerned. In compliance with this provision the claimant is obliged to provide the institution in the Member State from which he is claiming entitlement to benefits with information.

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3. Non-applicability of national prohibitions of cumulation (c) 5

This provision clearly states that national accumulation rules shall not be applied in the case of double provision of benefits pursuant to (b).

Article 40 Rules for taking into account special features of certain legislation (1) If there is no insurance against accidents at work or occupational diseases in the Member State in which the person concerned resides or stays, or if such insurance exists but there is no institution responsible for providing benefits in kind, those benefits shall be provided by the institution of the place of residence or stay responsible for providing benefits in kind in the event of sickness. (2) If there is no insurance against accidents at work or occupational diseases in the competent Member State, the provisions of this Chapter concerning benefits in kind shall nevertheless be applied to a person who is entitled to those benefits in the event of sickness, maternity or equivalent paternity under the legislation of that Member State if that person sustains an accident at work or suffers from an occupational disease during a residence or stay in another Member State. Costs shall be borne by the institution which is competent for the benefits in kind under the legislation of the competent Member State. (3) Article 5 shall apply to the competent institution in a Member State as regards the equivalence of accidents at work and occupational diseases which either have occurred or have been confirmed subsequently under the legislation of another Member State when assessing the degree of incapacity, the right to benefits or the amount thereof, on condition that: (a) no compensation is due in respect of an accident at work or an occupational disease which had occurred or had been confirmed previously under the legislation it applies; and (b) no compensation is due in respect of an accident at work or an occupational disease which had occurred or had been confirmed subsequently, under the legislation of the other Member State under which the accident at work or the occupational disease had occurred or been confirmed. Article 39 Reg. No. 987/2009 Assessment of the degree of incapacity in the event of occupational accidents or diseases which occurred previously or subsequently Where a previous or subsequent incapacity for work was caused by an accident which occurred when the person concerned was subject to the legislation of a Member State which makes no distinction according to the origin of the incapacity to work, the competent institution or the body designated by the competent authority of the Member State in question shall: (a) upon request by the competent institution of another Member State, provide information concerning the degree of the previous or subsequent incapacity for work, and where possible, information making it possible to determine whether the incapacity is the result of an accident at work within the meaning of the legislation applied by the institution in the other Member State; (b) take into account the degree of incapacity caused by these previous or subsequent cases when determining the right to benefits and the amount, in accordance with the applicable legislation.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Provision of benefits in kind on behalf of another institution in the absence of an accident insurance scheme (para. 1) . . . . . . . . . . . . . . . . . . 2. Provision of benefits in kind on behalf of another institution by the institution of the place of residence (para. 2) . . . . . . . . . . . . . . . . . . . . .

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Article 40 3. Consideration of accidents at work and occupational diseases that occurred previously or subsequently . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Previous accidents at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Subsequent accidents at work and occupational diseases. . . . . . . . 4. Administrative procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose

Art. 40 is the consequence of the diversity of accidence insurance schemes 1 and their individual rules. Coordination law must also provide an answer to the diversity of these rules. Para. 1 deals with the problem of there not being an insurance branch dedicated to accidents at work or occupational diseases in a Member State. There were also provisions in the past concerning the use of the medical system of an employer or obligations of employers to provide benefits (cf. Art. 61 (2 to 4) Reg. No. 1408/71). All these provisions have been abrogated. A new addition is the provision in para. 2. According to this para. insured persons from a Member State that does not provide for insurance covering accidents at work or occupational diseases, if they stay or reside in another Member State, shall receive benefits from the accident insurance of this Member State the costs of which are to be borne by the competent Member State. Para. 3 includes the provisions of the former Art. 61 (6) Reg. No. 1408/71 concerning the taking into account of accidents at work or occupational diseases that occurred or were diagnosed subsequently. II. Commentary 1. Provision of benefits in kind on behalf of another institution in the absence of an accident insurance scheme (para. 1)

Para. 1 provides a solution for the difficulties that arise if the Member State in 2 which the person concerned resides or stays does not provide for insurance covering accidents at work or occupational diseases. This rule is of particular importance in cases of posted workers. This provision, which in particular with regard to the absence of insurance covering accidents at work and occupational diseases gained importance in the Netherlands, designates competence to the institution of the place of residence of stay that provides benefits in kind in the event of sickness. 2. Provision of benefits in kind on behalf of another institution by the institution of the place of residence (para. 2)

Para. 2 contains a provision unknown in former legislation. It ensures em- 3 ployed persons from countries that have no specific rights to benefits in respect of accidents at work and occupational diseases, such as the Netherlands for example, rights to such benefits if they sustain an accident at work or contract an occupational disease in another Member State that has such an insurance Maximilian Fuchs

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scheme. The costs are assumed by the institution competent for benefits in kind in accordance with the legislation of the competent Member State. 3. Consideration of accidents at work and occupational diseases that occurred previously or subsequently a) Previous accidents at work 4

Whether or not there is a right to compensation due to an accident at work or an occupational disease and the amount thereof, is determined on principle according to the legislation of the competent State (cf. in this respect Art. 36 para. 3 et seq. above). In as far as the legislation of this State requires that accidents at work or occupational diseases that occurred previously must be taken into consideration in order to assess the degree of incapacity, to establish a right to any benefit or to determine the amount of the benefit, accidents at work or occupational diseases that occurred previously in another Member State must also be taken into account. Formerly this legal necessity was derived from the explicit provision of Art. 61 (5) Reg. No. 1408/71. According to currently applicable law this legal consequence is to be derived from Art. 5 (b). Art. 87 (3) is relevant with regard to accidents at work and occupational diseases that occurred before Reg. No. 883/2004 came into force (cf. to this topic CJEU, Case C-290/00 (Duchon), EU:C:2002:234). b) Subsequent accidents at work and occupational diseases

Para. 3 requires the taking into account of subsequent accidents at work or occupational diseases. It adheres to the provision included in the former Art. 61 (6) Reg. No. 1408/71. The background for this provision (and for this reason also of para. 3) are the Cases Villano and Barion. Both these Cases concerned plaintiffs who were Italian nationals and had sustained accidents at work in Germany that only resulted in a reduction of incapacity of less than 20%. This excluded the right to any compensation according to German law. The plaintiffs subsequently sustained accidents at work in Italy. If these accidents at work in Italy had been taken into consideration, the threshold of 20% would have been reached. Due to the legal situation at that time the CJEU was hindered from regarding these subsequent accidents as relevant for the German accident insurance institutions, due to the clear wording of Art. 61 (5) Reg. No. 1408/71, which only mentioned previous accidents at work. It also rejected the possibility of an analogue application (cf. CJEU, Case 173/78, 174/78 (Villano and Barion), EU:C:1979:134). However, this decision of the CJEU made a significant contribution to para. 6 being inserted in the former Art. 61 Reg. No. 1408/71 by Reg. No. 2000/83 (OJ (EG) L 230/1). Art. 40 (3) adheres to this regulation model. 6 Referring to the rule of equivalence in Art. 5, it stipulates that accidents at work or occupational diseases which either have occurred or have been confirmed subsequently shall be taken into consideration in order to assess the de5

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gree of incapacity, to establish the right to any benefit, or to determine the amount of such benefit. This shall, however only apply if firstly no compensation is due in respect of an accident at work or an occupational disease which had occurred or had been confirmed previously under the legislation it applies (a) and secondly no compensation is due in respect of an accident at work or an occupational disease which had occurred or had been confirmed subsequently, under the legislation of the other Member State under which the accident at work or the occupational disease had occurred or been confirmed (b). 4. Administrative procedure

In order to apply the aforementioned rules of equivalence the competent insti- 7 tution requires the appropriate information from the competent institution or the competent authority of the other Member State. The intention of Art. 39 Reg. No. 987/2009 is to ensure this exchange of information.

Article 41 Reimbursement between institutions (1) Article 35 shall also apply to benefits falling within this Chapter, and reimbursement shall be made on the basis of actual costs. (2) Two or more Member States, or their competent authorities, may provide for other methods of reimbursement or waive all reimbursement between the institutions under their jurisdiction. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Principles of reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Waiving of reimbursement convention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose

Art. 36 to 40 include numerous provisions whereby the institution of the place 1 of residence (or place of stay) must provide benefits in kind on behalf of and at the expense of an institution in another Member State. Reimbursement of the costs thus incurred is the subject matter of Art. 41. Consistently reference is also made here to the relevant provisions from the area of sickness and maternity benefits, specifically Art. 35. II. Commentary 1. Principles of reimbursement

The Art. 35 (1) referred to requires full reimbursement of the expenditure. 2 While Art. 35 (2) requires in this respect reimbursement on proof of actual expenditure or on the basis of fixed amounts, Art. 41 (1) (2) provides for reimMaximilian Fuchs

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bursement on the basis of actual expenditure. In compliance with Art. 66 (2)(1) Reg. No. 987/2009 settlement of the reimbursement between the institutions of the Member States is to be effected via the liaison bodies 2. Waiving of reimbursement convention 3

In compliance with Art. 41 (2) two or more Member States, or their competent authorities, may provide for other methods of reimbursement or waive all reimbursements. The same provision applies to the area of sickness benefits Art. 35 (3). So the independent provision in para. 2 was in fact superfluous. Referral to Art. 35 (3) would have been sufficient.

Chapter 3 Death grants

Article 42 Right to grants where death occurs in, or where the person entitled resides in, a Member State other than the competent Member State (1) When an insured person or a member of his/her family dies in a Member State other than the competent Member State, the death shall be deemed to have occurred in the competent Member State. (2) The competent institution shall be obliged to provide death grants payable under the legislation it applies, even if the person entitled resides in a Member State other than the competent Member State. (3) Paragraphs 1 and 2 shall also apply when the death is the result of an accident at work or an occupational disease. Article 42 Reg. No. 987/2009 Claim for death grants For the purposes of applying Articles 42 and 43 of the basic Regulation, the claim for death grants shall be sent either to the competent institution or to the institution of the claimant’s place of residence, which shall send it to the competent institution. The claim shall contain the information required under the legislation applied by the competent institution.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Origin of the right to a death grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Fictitious death in the territory of the competent State (para. 1) . . . . 3. Export of the benefit (para. 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Applicability in respect of accidents at work and occupational diseases (para. 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Administrative procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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from the territoriality principle in regard to death grants. Death in a Member State other than the competent State is deemed as a death in the latter (para. 1). Para. 2 ensures export of the benefit to the Member State of residence. II. Commentary 1. Origin of the right to a death grant

Art. 1 (y) defines a death grant as any one-off payment in the event of death 2 excluding the lump-sum benefits referred to in (d) (for the distinction between pension and death grant see CJEU, Case 130/73 (Vandeweghe), EU:C: 1973:131). Whether or not a right to death grants exists is a question subject to the legis- 3 lation of the competent Member State. The competent Member State and its competent institution are defined in Art. 1 (s) and (q). If according to these provisions the establishment of the right is conditional upon the completion of periods of insurance and residence, the corresponding periods completed in other Member States must also be taken into account. Formerly this legal necessity was derived from the provision of Art. 64 Reg. No. 1408/71; it now derives from Art. 6. 2. Fictitious death in the territory of the competent State (para. 1)

Para. 1 feigns the occurrence of death in the territory of the competent State 4 (para. 1). In principle this provision is superfluous, because the necessity of consideration is already determined in art. 5. 3. Export of the benefit (para. 2)

In compliance with para. 2 the fact that the person entitled to the benefit re- 5 sides in another Member State in no way affects the obligation to pay the death grant. With regard to determining residence see Art. 11 Reg. No. 987/2009. 4. Applicability in respect of accidents at work and occupational diseases (para. 3)

A death grant can also be a benefit in respect of accidents at work or occupa- 6 tional diseases. Para. 3 clearly states that para. 1 and 2 shall also apply here. 5. Administrative procedure

Art. 42 Reg. No. 987/2009 stipulates that the claim for death grants must be 7 sent either to the competent institution or to the institution of the claimant’s place of residence, which shall send it the competent institution. In order to enable correct processing of the claim, the claimant is obliged, in accordance with Art. 42 Reg. No. 987/2009 to provide information.

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Article 43 Provision of benefits in the event of the death of a pensioner (1) In the event of the death of a pensioner who was entitled to a pension under the legislation of one Member State, or to pensions under the legislations of two or more Member States, when that pensioner was residing in a Member State other than that of the institution responsible for the cost of benefits in kind provided under Articles 24 and 25, the death grants payable under the legislation administered by that institution shall be provided at its own expense as though the pensioner had been residing at the time of his/her death in the Member State in which that institution is situated. (2) Paragraph 1 shall apply mutatis mutandis to the members of the family of a pensioner.

The institution liable for the costs for benefits in kind pursuant to Art. 24 and 25 must also provide the death grant at its own expense, even if the claimant resides in another Member State. The intention of this provision is to prevent such difficulties as those that arose under Luxembourg law. If the recipient of a Luxembourg old-age or invalidity pension residing in another EU state dies, according Luxembourg legislation the death grant is provided by the statutory health insurance scheme.

Chapter 4 Invalidity benefits Bibliography: Eichenhofer, Europäisches Sozialrecht, European Social Law, 4th ed. 2010, § 9; Reinhard/Kruse/v. Maydell (publ.), Invaliditätssicherung im Rechtsvergleich (comparative law on invalidity provision), Baden-Baden 1998;Terwey, Nationale Alterssicherungssysteme und Europäischer Binnenmarkt (national systems for old-age provision and the European single market), ZESAR 2006, 246 et seq.; Verschueren, Neue Vorschriften in der Verordnung 883/2004 über Leistungen bei Invalidität und Altersrenten sowie beitragsunabhängige Leistungen (new provisions in Regulation 883/2004 for invalidity benefits, old-age pensions and benefits independent of contributions): Eichenhofer (publ.), 50 Jahre nach ihrem Beginn – Neue Regelungen für die Koordinierung sozialer Sicherheit (fifty years after commencement – new regulations on coordinating social security), 2009, p. 223 et seq.

Overview Chapter 2 Title III, Invalidity in Reg. 1408/71, was revised in this chapter, the previous regulations shortened, simplified and re-edited. The substantive rules remained essentially the same. The proposal to establish a uniform system for coordinating invalidity benefits made by the Commission in 1998 was not implemented. 2 Considerable deviations between the legal requirements of the Member States, regarding invalidity benefits, prompted the regulator in Art. 44-49 (as before in Art. 37-41 Reg. 1408/71 and in Art. 24-26 Reg. 3) to differentiate be1

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tween two types of systems of security concerning the risk of invalidity: Type A, according to the legal provisions of which the amount of invalidity benefit is independent of the length of the periods of insurance or residence (and depends exclusively on the fact that the person was insured at the time the person became an invalid), and Type B, systems of security, where the benefits are calculated in accordance with the aggregated periods of insurance or residence (Art. 44 (1)). Basically, this chapter contains separate coordination for people to whom the legal requirements of two or more Member States applied successively or alternately and who have aggregated periods of insurance or residence exclusively under the legal provisions of type A legislation, especially with regard to the mutual recognition of invalidity and its aggravation (Recital 26). For the rest, i.e. in the event of the aggregation of periods in Type B systems of security only or in both Types, Art. 46 (1) refers to the corresponding application of the regulations for coordination in Chapter 5 (old-age pensions and survivors’ benefits). Type A systems of security of Member States, which are coordinated according to the provisions in Chapter 4, are listed in Annex VI (Art. 44 (1)). Since they are coordinated according to the provisions in Chapter 5, the regulations in this chapter are not relevant to those insured with other insurance systems. In the Regulation the concept of invalidity (see also Art. 3 (1)(c) and the com- 3 mentary therein) is not more closely defined, moreover the CJEU has only described it very vaguely as yet, stating that invalidity benefits must relate to capacity for work (see in particular CJEU, Case C-14/72 (Heinze), EU:C:1972:98; see also Case C-15/72 (Lower Saxony), EU:C:1972:99 and Case C-16/72 (Hamburg AOK (=Health Insurance Fund)), EU:C:1972:100). Definition of the risk of ‘invalidity’ as a concrete fact based on the requirements under which invalidity benefits are paid remains the responsibility of the Member States; a definition specifically regarding benefits under European Union law or the CJEU would not be covered by the coordination task and merely have harmonising effects. Concerning legislation on coordination, the different conditions attached to invalidity benefits of the Member States remain, as do the potential disadvantages for those concerned who are entitled to receive them. Within the framework of such special coordination, these are ignored for Type A systems of security, provided exceptional compliance with this condition is possible, which is binding on other Member States under convergent conditions for all Member States (see Art. 46 (3)) in conjunction with Annex VII). A (general) definition of invalidity is as follows: the risk of permanent or at 4 least persistent lessening or loss of the ability to engage in any gainful activity, resulting from physical or mental impairment, which is regular and typically associated with a decline in income which needs to be offset. In this sense, invalidity benefits are also described in Convention 102 of the International Labour Organization on minimum social security standards (Art. 53 et seq.). This is also the case as regards eligibility for invalidity benefits in Member States (see the commentary on Art. 3). Rolf Schuler

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The Rehabilitation benefits (of preventive or rehabilitative nature) of Member States are also included in respect of the risk attached to invalidity. The CJEU has long since made it a condition of eligibility that the concept of social security should also encompass preventive protection (CJEU, Case C-14/72 (Heinze), EU:C:1972:98, also Case C-818/79 (Mittelfranken AOK), EU:C:1980:216) and the social security systems of all the Member States, including e.g. the reimbursement of social insurance contributions (CJEU, Case C-104/76 (Jansen), EU:C:1977:72). Hence Art. 4 Reg. 1408/71 had explicitly mentioned ‘Benefits to maintain or improve capacity for work’. No longer mentioned explicitly in Art. 3, these benefits (of course) remain included in coordination, albeit with different eligibility criteria. As medical or surgical benefits they are allocated to sickness or maternity benefits as understood in Art. 4 (1 lit. a) (CJEU, Case C-69/79 (Jordens-Vosters), EU:C:1980:7) and are subject to the conditions attached to coordination in Chapter 1 of Title III (Sickness, maternity and equivalent paternity benefits). Besides relating to the risk of invalidity, benefits for occupational integration/promotion/continuing professional development/retraining also refer to unemployment and, as essential components of these benefits and/or their primary objectives, must always be allocated to the respective regulations on coordination. 6 The law on allocating care needs to social security, as a new component, is not regarded as relating to capacity for work; hence its allocation to the risk of invalidity. In terms of the law on coordination in case law, this has been allocated to the risk of sickness since the ruling of the CJEU in Case C-160/96 (Molenaar), EU:C:1998:84. This has not been amended in the new Regulation of which the purpose is not special coordination for this risk, but merely a special rule regarding the overlapping of care benefits (Art. 34). 5

Article 44 Persons subject only to type A legislation (1) For the purposes of this Chapter, "type A legislation" means any legislation under which the amount of invalidity benefits is independent of the duration of the periods of insurance or residence and which is expressly included by the competent Member State in Annex VI, and "type B legislation" means any other legislation. (2) A person who has been successively or alternately subject to the legislation of two or more Member States and who has completed periods of insurance or residence exclusively under type A legislations shall be entitled to benefits only from the institution of the Member State whose legislation was applicable at the time when the incapacity for work followed by invalidity occurred, taking into account, where appropriate, Article 45, and shall receive such benefits in accordance with that legislation. (3) A person who is not entitled to benefits under paragraph 2 shall receive the benefits to which he/she is still entitled under the legislation of another Member State, taking into account, where appropriate, Article 45. (4) If the legislation referred to in paragraph 2 or 3 contains rules for the reduction, suspension or withdrawal of invalidity benefits in the case of overlapping with other income

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Article 44 or with benefits of a different kind within the meaning of Article 53(2), Articles 53(3) and 55(3) shall apply mutatis mutandis. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Scope of Art. 44-49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Separate coordination of invalidity benefits for people to whom only Type A legal provisions applied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Type A legal provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 2 3 3

I. Spirit and Purpose 1. Scope of Art. 44-49

With mainly editorial modifications, Art. 44-49 replace Art. 37-39 Reg. 1 1408/71. These provisions only apply if the person entitled was insured for Type A systems of security only, i.e. according to the legal definition in Art. 44 (1), and was only subject to legal provisions according to which the amount of invalidity benefits is independent of the length of the periods of insurance and residence. The content of these coordination techniques is oriented towards the stipulations in the convention between the Member States with systems of security of this type, specifically towards the social security provisions in the General Convention between Belgium and France of 17 January 1948. Pension insurance systems, where the benefits depend on the length of the insurance periods and which are therefore Type B, are applied in accordance with the regulations in Art. 45 in conjunction with Art. 51 (1) in Chapter 5. 2. Separate coordination of invalidity benefits for people to whom only Type A legal provisions applied

Invalidity benefits for Type A systems of security are not calculated and coor- 2 dinated according to the pro rata temporis procedure (see Art. 52), but designated the sole responsibility of the competent institutions of the Member State, to the legal provisions of which the person entitled was subject at the time the insured person became unable to work or unemployed, provided that the conditions attached to the benefits (taking account of any periods in other Member States according to Art. 45) are met (Art. 44 (2)). The competent institutions of this Member State award a full pension at their expense. The person entitled has only a subsidiary claim against the competent institutions of other Member States (Art. 44 (3)) if invalidity benefit conditions exist under the legislation of that Member State.

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II. Commentary Type A legal provisions

A condition for applying the special rules on coordination in Art. 44 et seq. is not merely that the condition deals with Type A legal provisions according to the legal definition, but that this condition was explicitly included in Annex VI by the competent State. Hence inclusion in the Annex is a constitutive element for the application of these special rules on coordination. Concerning invalidity benefits, Member States with Type A legal provisions are free to decide between either coordination according to Art. 44 et seq. or coordination according to Art. 50 et seq. 4 In ANNEX VI the following systems of social security of the Member States of type A legislation are identified which should be subject to special coordination: 3

CZECH REPUBLIC Full disability pension for persons whose total disability arose before reaching 18 years of age and who were not insured for the required period (Section 42 of the Pension Insurance Act No 155/1995 Coll.) ESTONIA (a) Invalidity pensions granted before 1 April 2000 under the State Allowances Act and which are retained under the State Pension Insurance Act (b) National pensions granted on the basis of invalidity according to the State Pension Insurance Act (c) Invalidity pensions granted according to the Defence Forces Service Act, Police Service Act, Prosecutor's Office Act, Status of Judges Act, Members of the Riigikogu Salaries, Pensions and Other Social Guarantees Act and President of the Republic Official Benefits Act IRELAND Part 2, Chapter 17 of the Social Welfare Consolidation Act 2005 GREECE Legislation relating to the agricultural insurance scheme (OGA), under Law No 4169/1961 CROATIA (a) Invalidity pension due to occupational injury or disease according to Article 52(5) of the Pension Insurance Act (OG 102/98, as amended). (b) Physical damage allowance according to Article 56 of the Pension Insurance Act (OG 102/98, as amended).

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LATVIA Invalidity pensions (third group) under Article 16(1)(2) of the Law on State Pensions of 1 January 1996 HUNGARY As from 1 January 2012 pursuant to the Act CXCI of 2011 on the benefits for persons with changed working capacity and amendments of certain other acts: (a) the rehabilitation benefit; (b) the invalidity benefit. SLOVAKIA Invalidity pension for a person who became invalid as a dependent child or during full-time doctoral studies while under the age of 26 years and who is always deemed to have fulfilled the required period of insurance (Article 70(2), Article 72(3) and Article 73(3) and (4) of Act No 461/2003 on social insurance, as amended). FINLAND National Pensions to persons who are born disabled or become disabled at an early age (the National Pension Act, 568/2007); Invalidity pensions determined according to transitional rules and awarded prior to 1 January 1994 (Act on Enforcement of the National Pensions Act, 569/2007). SWEDEN Income-related sickness benefit and activity compensation (Chapter 34 of the Social Insurance Code (2010:110) UNITED KINGDOM Employment and Support Allowance a) Great Britain Part 1 of the Welfare Reform Act 2007. b) Northern Ireland Part 1 of the Welfare Reform Act (Northern Ireland) 2007.

Article 45 Special provisions on aggregation of periods The competent institution of a Member State whose legislation makes the acquisition, retention or recovery of the right to benefits conditional upon the completion of periods of insurance or residence shall, where necessary, apply Article 51(1) mutatis mutandis.

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Art. 45 replaces Art. 38 Reg. 1408/71, in that it refers to the corresponding application of Art. 51 (A (1) if this is exceptionally required for the competent institution of a Type A system of security. Accordingly all the requirements in Chapter 5 apply to Type B systems of security (such as the German pension insurance system) (Art. 46 (1)). 2 The coordination provided for by Article 6 and Art. 5 requires, that account must be taken of any period during which, in respect of that incapacity to work, the claimant has, under the legislation of the second Member State, received either cash sickness benefits, or continued to receive a wage or salary, or invalidity benefits which followed that incapacity to work, as if it were a period during which cash sickness benefits were paid to him under the legislation of the first Member State or during which he was incapable of working within the meaning of that legislation (former Article 40(3)(a) of Regulation No 1408/71). 3 Legal Systems of Type A like the Belgian system, which makes acquisition of the right to invalidity benefits subject to the condition that a period of primary incapacity of one year has elapsed, has in case of international careers with contributions to a system of type B (immediately pay a pro-rata-invalidity benefit and therefore no sickness benefit) the result that a migrant worker has paid into the social security scheme of that Member State contributions on which there is no return and is therefore at a disadvantage by comparison with a non-migrant worker. Therefore Article 39 EC must be interpreted as precluding application of such a regulation by the competent authorities of a Member State of national legislation (see CJEU, case C-3/08 (Leyman), EU:C: 2009: 595). 1

Article 46 Persons subject either only to type B legislation or to type A and B legislation (1) A person who has been successively or alternately subject to the legislation of two or more Member States, of which at least one is not a type A legislation, shall be entitled to benefits under Chapter 5, which shall apply mutatis mutandis taking into account paragraph 3. (2) However, if the person concerned has been previously subject to a type B legislation and suffers incapacity for work leading to invalidity while subject to a type A legislation, he/she shall receive benefits in accordance with Article 44, provided that: – he satisfies the conditions of that legislation exclusively or of others of the same type, taking into account, where appropriate, Article 45, but without having recourse to periods of insurance or residence completed under a type B legislation, and – he does not assert any claims to old-age benefits, taking into account Article 50(1). (3) A decision taken by an institution of a Member State concerning the degree of invalidity of a claimant shall be binding on the institution of any other Member State concerned, provided that the concordance between the legislation of these Member States on conditions relating to the degree of invalidity is acknowledged in Annex VII.

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Article 46 Article 49 Reg. No. 987/09 Determination of the degree of invalidity (1) Where Article 46(3) of the basic Regulation is applicable, the only institution authorised to take a decision concerning the claimant’s degree of invalidity shall be the contact institution, if the legislation applied by that institution is included in Annex VII to the basic Regulation, or failing that, the institution whose legislation is included in that Annex and to whose legislation the claimant was last subject. It shall take that decision as soon as it can determine whether the conditions for eligibility laid down in the applicable legislation are met, taking into account, where appropriate, Articles 6 and 51 of the basic Regulation. It shall without delay notify the other institutions concerned of that decision. Where the eligibility criteria, other than those relating to the degree of invalidity, laid down in the applicable legislation are not met, taking into account Articles 6 and 51 of the basic Regulation, the contact institution shall without delay inform the competent institution of the last Member State to whose legislation the claimant was subject. The latter institution shall be authorised to take the decision concerning the degree of invalidity of the claimant if the conditions for eligibility laid down in the applicable legislation are met. It shall without delay notify the other institutions concerned of that decision. When determining eligibility, the matter may, if necessary have to be referred back, under the same conditions, to the competent institution in respect of invalidity of the Member State to whose legislation the claimant was first subject. (2) Where Article 46(3) of the basic Regulation is not applicable, each institution shall, in accordance with its legislation, have the possibility of having the claimant examined by a medical doctor or other expert of its choice to determine the degree of invalidity. However, the institution of a Member State shall take into consideration documents, medical reports and administrative information collected by the institution of any other Member State as if they had been drawn up in its own Member State.

I. Spirit and Purpose

With mainly editorial modifications, Art. 46 replaces Art. 40 Reg. No. 1 1408/71. Art. 46 (1) contains complementary regulations to Art. 44 (2). If a person was insured for an old-age pension in more than one Member State and at least one of these is Type B due to the similarity in the way benefits are calculated within these systems, paragraph 1 refers to the coordination rules in Chapter 5. If firstly Type B legal provisions and secondly Type A legal provisions applied to a person, paragraph 2 provides that the person can claim (alternative) benefits according to Art. 44 under certain conditions. Paragraph 3 extends the binding nature of the decisions of one competent institution on the degree of invalidity to the competent institutions of all the other Member States with convergent definitions for degrees of invalidity according to the provisions in Annex VII. II. Commentary

Paragraph 1 restricts the application of the rules on coordination in Chapter 4 2 to persons who were only subject to the legal provisions of Member States, which are Type A. If the Type B legal provisions of a Member State for covering the risk of invalidity are converted into Type A ones, according to the concept of coordination of the Regulation this must not lead to any reduction in the insured person’s claims: if necessary Art. 51 (previously: Art. 45 (3) Reg. No. 1408/71) should also be applied to these (see CJEU, Case C-109/76 (Blottner), EU:C: 1977:102). However, unlike paragraph 1, according to paragraph 2 the competent institu- 3 tions of Type A systems of security of the Member States are only obliged to

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provide full old-age pensions if the people entitled to such were insured against unemployment with such a system when they first became unable to work and the conditions of benefits according to the legal provisions of Type B are met, regardless of the periods of insurance and residence, provided no claims against Member States with Type B legal provisions can be upheld. Accordingly, those entitled can choose between benefits according to Art. 44 et seq. and benefits according to Art. 50 et seq. This rule is based on the principle that the European rules on coordination must not lead to any reduction in claims which already exist, purely by virtue of the law applicable to all Member States (known as the Principle of favourability or Petroni Principle, see Art. 10 Reg. No. 3). 4 If a person entitled to make a claim was first insured according to Type A legal provisions and subsequently according to Type B legal provisions, this person’s claims, including those under Type A systems for invalidity, will always be calculated pro rata temporis. 5 The binding effect of the decision on the degree of a claimant’s invalidity reached by the competent institution of one Member State laid down in para. 3 only applies to the competent institutions of other Member States, in which concordance of the features of the facts in Annex VII in the respective definitions of invalidity was recognised, i.e. only to Belgium, France and Italy. Regarding compensation, due (only) to the disadvantageous aims of Art. 45 and Art. 48 of the TFEU (= Art. 39 and Art. 42 EC) as interpreted by the CJEU, this binding effect only applies to a recognition of invalidity, not, however, to a subsequent decision on whether invalidity does not and/or has ceased to exist (CJEU, Case C-232/82 (Baccini), EU:C:1983:70). Due to the former, differentiating rules on total occupational incapacity and safeguards against the risk of invalidity, the Federal Republic of Germany has not been and is not listed in the Table of concordance. Otherwise, in terms of comparative law, it is possible to establish some mainly conceptual concordance of the rules of the Member States, which the diverse, subtle arrangement of these areas by the respective administrative practices and respective case law of the Member States refutes, yet at the same time a degree of harmonisation and Europeanisation of social security against this risk. 6 Accordingly, apart from administrative and medical control of the place of stay or residence of the benefit recipient, the institution competent for the benefits can also order an examination by a doctor of its choice. This obliges the benefit recipient to go to the Member State of the competent institution if said competent institution can pay the travel and accommodation expenses involved and the person concerned can undertake the journey without endangering his or her health (CJEU, Case C-344/89 (Martinez Vidal), EU:C:1991:277).

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Article 48

Article 47 Aggravation of invalidity (1) In the case of aggravation of an invalidity for which a person is receiving benefits under the legislation of one or more Member States, the following provisions shall apply, taking the aggravation into account: (a) the benefits shall be provided in accordance with Chapter 5, applied mutatis mutandis; (b) however, where the person concerned has been subject to two or more type A legislations and since receiving benefit has not been subject to the legislation of another Member State, the benefit shall be provided in accordance with Article 44(2). (2) If the total amount of the benefit or benefits payable under paragraph 1 is lower than the amount of the benefit which the person concerned was receiving at the expense of the institution previously competent for payment, that institution shall pay him/her a supplement equal to the difference between the two amounts. (3) If the person concerned is not entitled to benefits at the expense of an institution of another Member State, the competent institution of the Member State previously competent shall provide the benefits in accordance with the legislation it applies, taking into account the aggravation and, where appropriate, Article 45.

With editorial modifications, Art. 41 replaces Reg. No. 1408/71. It is addressed to the competent institutions of Member States with Type A pension schemes (see preliminary remarks. Reg. No. 2; Art. 44 Reg. No. 1).

Article 48 Conversion of invalidity benefits into old-age benefits (1) Invalidity benefits shall be converted into old-age benefits, where appropriate, under the conditions laid down by the legislation or legislations under which they are provided and in accordance with Chapter 5. (2) Where a person receiving invalidity benefits can establish a claim to old-age benefits under the legislation of one or more other Member States, in accordance with Article 50, any institution which is responsible for providing invalidity benefits under the legislation of a Member State shall continue to provide such a person with the invalidity benefits to which he/she is entitled under the legislation it applies until paragraph 1 becomes applicable in respect of that institution, or otherwise for as long as the person concerned satisfies the conditions for such benefits. (3) Where invalidity benefits provided under the legislation of a Member State, in accordance with Article 44, are converted into old-age benefits and where the person concerned does not yet satisfy the conditions laid down by the legislation of one or more of the other Member States for receiving those benefits, the person concerned shall receive, from that or those Member States, invalidity benefits from the date of the conversion. Those invalidity benefits shall be provided in accordance with Chapter 5 as if that Chapter had been applicable at the time when the incapacity for work leading to invalidity occurred, until the person concerned satisfies the qualifying conditions for old-age benefit laid down by the national legislations concerned or, where such conversion is not provided for, for as long as he/she is entitled to invalidity benefits under the latter legislation or legislations. (4) The invalidity benefits provided under Article 44 shall be recalculated in accordance with Chapter 5 as soon as the beneficiary satisfies the qualifying conditions for invalidity Rolf Schuler

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I. Spirit and Purpose 1

Editorially revised, Art. 48 replaces Art. 43 Reg. No. 1408/71. The provision addresses the problem of different age limits for old-age pensions in the legal provisions of the Member States and regulates the co-existence of invalidity benefits and age-related benefits of the competent institutions of different Member States. II. Commentary 1. Different age limits as a problem of coordination

Age limits are the regulating instruments of the respective statutory schemes of the Member States. However, like all the differences between Member States concerning the benefit conditions for safeguarding against social security risks, different age limits restrict the effects of the coordination of European pension law considerably. Due to the different age limits in the statutory schemes of the Member States, interim periods arise for persons who were subject to the statutory scheme of more than one Member State, which allowed these persons to claim partial pensions for these interim periods from the competent institution of the Member State with the lower age limit; the result is partial provision and often the actual continuation of gainful employment until the claimant reaches the respective higher age limit. 3 European pension law does not seek the comprehensive harmonisation of these differences; it has as yet merely addressed the issue of making age limits in general more flexible. Increasingly, however, it regards creating uniform age limits for men and women as an urgent matter (see Art. 7 Directive 79/7 EEC). In addition, strict application of Art. 157 TFEU (= Art. 141 EC) does not allow the different age limits in the statutory/public systems to affect the regulations of the social security systems in operation. 2

2. The co-existence of invalidity and age-related pensions 4

In paragraph 1 the principle that the invalidity benefits must be converted into old-age pensions to comply with the law of each Member State according to the provisions in Chapter 5 is laid down, which in concrete terms means that the 332

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old-age pensions will be calculated as pro-rata-temporis benefits and paid as partial pensions with respect to the entire biography of the person entitled to them. Paragraph 2 of the provision deals with the fact that different age limits for 5 old-age pensions are laid down in the pension schemes of the Member States. On the one hand this regulates the compatible co-existence of drawing invalidity benefits whilst drawing old-age pensions according to the legal provisions of a different Member State. The provision makes it clear that drawing an old-age pension from an external Member State does not lead to the removal of invalidity benefits. As regards the length of time invalidity benefits can be drawn and their conversion into old-age pensions, the regulation refers to the applicable law of the respective Member State. For those drawing uniform pensions according to the Type A legal provisions 6 of one Member State in accordance with Art. 44, and transferring to pensions linked to the age-related transfer to European partial pensions, paragraph 3 of the provision stipulates that both types of pensions may also co-exist in this case, and that, where applicable, the obligation to pay these of the institution not responsible for paying invalidity benefits hitherto according to Art. 44, is reinstated. Granted according to Chapter 5 (para. 4(2)), these benefits are therefore calculated according to Art. 52 and, where applicable, paid pro rata temporis. Para. 4 extends this regulating mechanism to invalidity benefits which are paid according to Art. 44 (see Reg. No. 8 below). Concerning full Type A pensions according to Art. 44, unlimited further pay- 7 ment (albeit subject to entitlement according to Chapter 5) of a non-reduced invalidity benefit at the same time as the payment of an old-age pension (or one in accordance with a Type B legal provisions) from another Member State pension scheme would lead to an unjustifiable accumulation of benefits and the overcompensation of the person entitled. Hence such invalidity benefits are treated like old-age pensions in accordance with para. 44, and paid as partial pensions (calculated according to the pro rata temporis procedure), in accordance with national legal provisions in conjunction with the regulations in Chapter 5. 3. Different dates of birth as a problem of coordination

Similar problems of coordination to those concerning the different age limits 8 for old-age pensions in EU Member States arise when the respective different dates of birth of the beneficiaries are regarded as crucial for calculating the required statutory age limit for old-age pensions. These problems occur when those insured (older people of working age) have their dates of birth amended to earlier ones by the authorities and the courts and the corresponding court decisions, based on which the respective dates of birth were changed, are not (cannot be) recognised by the national institutions responsible for pension insurance. Regarding benefits, the CJEU has excluded the blanket, general treatment of 9 these cases, establishing that the national competent institutions for social security and the courts of one Member State have an obligation to comply with the Rolf Schuler

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documents and similar papers about a person’s civil status, issued by the competent institutions of other Member States, provided their correctness is not seriously called into question by concrete indications specifically related to the respective individual case (CJEU, Case C-336/94 (Dafeki), EU:C:1997:579). Giving the reasons for its decisions, the court argued that claims arising from employees’ freedom of movement could not be upheld without submission of their personal documents. Accordingly, a general, abstract rule of proof in force in national law, according to which, should several, successively issued documents contain contradictions, the document which is closest in terms of time and distance to the event requiring proof takes precedence, cannot justify a refusal to take into account an amendment made by the court of another Member State, failing the existence of any other sufficient proof. 10 Regarding the effects of Turkish-EU Association Law, the CJEU has decided (Case C-102/98 and Case C-211/98 (Kocak and Örs), EU:C:2000:119) that the direct ban on discrimination in Art. 3 (1) of Decision No 3/80 (in this connection see CJEU, Case C-262/96 (Sürül), EU:C:1999:228) does not forbid a Member State from introducing a regulation, based on which the decisive date of birth is the one established in the document on the date when the foreign worker was first registered with a national body responsible for social security. In this connection the Court also referred to the legal requirements for managing the civil status register and the “special conditions under which this is handled in practice in Turkey”, also to the fact that, according to Turkish law, in the context of social security the decisive date of birth remains the one given when a person first becomes insured. 4. Excursus: Age limits in statutory pension insurance and age discrimination 11

The age limits laid down in the statutory pension schemes become significant in the law on discrimination and above all in employment law. The ban on age discrimination issued in Directive 2000/78 must be regarded in the light of the right to work recognised in Art. 15 (1) of the Charter of Fundamental Rights of the European Union. According to CJEU case law older employees’ remaining in their professional lives promotes diversity in employment and is a matter for the the Union legislator as a way of contributing to employees’ personal development and quality of life (CJEU, Case C-159/10 (Fuchs and Köhler), EU:C: 2011:508 and Case C-160/10 (Köhler), EU:C:2010:261). As understood in Art. 6 (1) lit. a) of Directive 2007/8, statutory age limits, at which employment contracts end under employment or collective agreements if applicable, represent unequal treatment on account of age, but do not signify discrimination, provided they are objective and appropriate in the context of national law and justified by a legitimate aim, meaning in particular a lawful aim relating to employment policy, the labour market and vocational training, and the means of achieving this aim are appropriate and necessary. 334

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In this context the CJEU has decided that automatically ending the employ- 12 ment contracts of employees who, in terms of age and the payment of contributions, meet the relevant requirements for drawing their pensions, has long since been part of the employment law of many Member States and is generally customary in employment relations. Based on achieving a balance between political, economic, social demographic and/or budgetary considerations, this mechanism depends on the decision as to whether to extend the working lives of employees or, instead, provide for their early retirement (CJEU, Case C-45/09 (Rosenbladt), EU:C:2010:601, para. 44). In conclusion, age limits are therefore permitted if they relate to the times at which the employees become entitled to draw their (statutory) old-age pensions, it being immaterial whether an individual employee receives a sufficient amount of old-age pension (cf. CJEU, Case C-141/11 (Hörnfeldt), EU:C:2012:421).

Article 49 Special provisions for civil servants Articles 6, 44, 46, 47 and 48 and Article 60(2) and (3) shall apply mutatis mutandis to persons covered by a special scheme for civil servants.

I. Spirit and Purpose

The provision replaces Art. 43 a (1) Reg. No. 1408/71, its language having 1 been simplified by means of reference to Art. 60 (2) and (3). After year-long discussions on the coordination of special schemes for civil servants under Community law and following the CJEU’s clear indication and task in Case C-443/93 (Vougioukas), EU:C:1995:394) the regulation was originally introduced by Reg. No. 1606/98 of the Council, dated 29 June 1998 (cf. OJ (EC) L 209) with effect from 25 October 1998. II. Commentary

These regulations extend the legal provisions for coordinating invalidity 2 benefits (Art. 44 et seq.) to people who are registered under special schemes for civil servants. The regulations on equality and equivalence as regards invalidity benefits, which are applicable to general schemes, should be applied accordingly. Cf. also Art. 3 Reg. 48 ff. and in addition the commentary on Art. 60.

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Chapter 5 Old-age and survivors' pensions Bibliography: European commission (publ.), Missoc, Social Security in the EU Member States, 2008; Giesen, Soziale Sicherheit der Wanderarbeitnehmer – Zusammentreffen von Renten, die aufgrund der Rechtsvorschriften mehrerer Mitgliedstaaten gewährt werden (social security of migrant workers – coincidence of pensions which are granted on the basis of the legal provisions of more than one Member State), ZESAR 2002, S. 74 ff; Jorens (publ.), 50 Jahre Koordinierung der sozialen Sicherheit (fifty years of social security coordination), 2010; Schuler, Das internationale Sozialrecht in der Bundesrepublik Deutschland (international social law in the Federal Republic of Germany), 1988.

Overview 1. Material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Aim of the Regulation and principle of coordination . . . . . . . . . . . . . . . . 3. Coordination, convergence and open coordination of pension schemes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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1. Material scope

The regulations in Chapter 5 replace those in Chapter 3 of Title III of Reg. No. 1408/71; although they contain little new information, the key regulations have been considerably editorially revised. They represent the core areas covered by Community law on the coordination of the pension schemes legislation of the Member States and concern not only old-age pensions and death grants in the Federal Republic of Germany based on the reference to Art. 46 (1), but also invalidity benefits, not however pensions in respect of children or orphans’ pensions. In this respect coordination is uniform. As is the case with invalidity benefits, there was no need for parallel regulations on old-age pensions and death grants. 2 The system of coordination under the Regulation refers to (all) old-age provision (Art. 3 (1)(d)) which is based on a general, binding law as understood in Art. 1(l), ‘legal provisions’, regardless of the specific arrangements of the statutory pension schemes of the Member States, i.e. to all the schemes in the first pillar of the three pillar model, has now become customary in both national and international contexts. Hence in pension law so-called supplementary pension schemes remain an exception, in particular company supplementary pension schemes (second pillar of the three pillar model), insofar as these are neither covered by the term ‘legal provisions’ in Art. 1(l) nor explicitly included in an appropriate explanatory note by the Member State. These supplementary pension schemes have been coordinated under Directive 98/49/EC of 29 June 1998 to safeguard supplementary pension claims, which, due to the individual character of these schemes and pensions (under labour law, earnings and therefore pri1

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vate law) deviates from the coordination system under the Regulation. Consequently, the material scope of application of these coordination mechanisms is (continues to be) strictly separate. Neither a pension nor a benefit can be subject to both the provisions of Directive 98/49/EC and those of the Regulation (see Preamble no. 5 Directive 98/49/EC) at once. The definition of pension in Art. 1(w) merely extends the spectrum of the benefits thereby covered, provided that, according to the cited criteria, the underlying security system is included in the material scope of application of the Regulation. Finally, the only schemes excluded from the material scope of application of pension coordination are schemes in the third pillar, i.e. private pensions, which, like most of the schemes in the second pillar, are not based on ‘legal provisions’ as understood in Art. 1(l). 2. Aim of the Regulation and principle of coordination

Like the coordination of social law as a whole, that of pension law in the 3 Member States is, albeit not exclusively, linked to people’s fundamental right to freedom of movement and in accordance with CJEU case law serves to compensate for the disadvantages as regards social law, which arise as a result of protecting freedom of movement in accordance with Art. 45 TFEU (= Art. 39 EC). However, it is also bound up with the notion of justice under international and social law. For people with a European ‘pension biography’, i.e. for people who were 4 subject to the pension law of more than one Member State (Art. 46 (1)), the task of Art. 48 TFEU (= Art. 42 EC) was honoured and periods in Member States, which supported claims, were taken into account in the context of (insurance) payment criteria (Art. 6, Art. 51) and as regards calculating amounts (Art. 52 et seq.). Such coordination of pension law allows it to remain the duty of individual Member States to grant and pay the pension due, thereby Europeanising it. In other words, there is no such thing as a ‘total European pension’, instead what are known as partial pensions (calculated pro rata temporis) remain in the Member States involved, which are also paid in full to those entitled to such who reside in another Member State, according to the principle of exporting (cross-border) pensions (Art. 7). The only exceptions (apart from pensions in respect of children or orphans’ pensions) are pension claims arising from what are known as mini-periods, for administrative and practical reasons (Art. 57). Harmonisation of the pension schemes in the Member States is not linked to the regulations in Chapter 5 due to the regulatory task that is restricted to the coordination of the pension schemes in the Member States Art. 48 TFEU (ex Art. 42 EC). Therefore the different regulations on payment criteria, the amounts and their funding all remain subject to the respective applicable legal provisions of the Member States. The general stipulation on the assimilation of facts that occur in other Mem- 5 ber States and/or under applicable laws in external Member States (Art. 5) is Rolf Schuler

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particularly important for coordinating pension insurance schemes, based as it is on CJEU case law regarding Art. 3 Reg. No. 1408/71 and on Art. 39, 42 EC (now Art. 45, 48 TFEU), whereby indirect and/or direct discrimination is banned and in consequence the assimilation of facts is compulsory. 3. Coordination, convergence and open coordination of pension schemes

The coordination regulations in this chapter also accept the different arrangements of pension law in the Member States as specified, such as those regarding the age limits for claiming pensions. However, such differences restrict the effectiveness of this coordination in the real lives of those affected. The state pension schemes in the Member States differ considerably both in concept, especially in terms of individual application (group pensions versus national pensions (pension insurance)), of funding (through taxes and/or contributions, pay-asyou-go funding or capital cover), also in terms of the amounts sought (basic provision versus – appropriate – full provision), not least in the variety of ways the pensions are specifically designed. New developments in the design of the pension schemes in the Member States mean that the Member States are increasingly introducing schemes included in the second pillar, making these statutory and therefore subject to the Regulation or designing their schemes in the first pillar as pension accounts or schemes covered by capital, and thereby causing particular problems as regards coordination. Legal harmonisation of the pension schemes which the Member States are competent to regulate has not been sought, although for some time now the Member States have been making efforts to collaborate and trying to align their aims and policies for social security more closely since the early 1990 s. This convergence strategy has largely lacked an independent concept of content, not least for pension policy. As part of a ‘concerted strategy for modernising social protection’ (as the Commission Communication (COM (97) 102 of 14 July 1999 is titled), given the demographic changes in the Member States, the Commission regards the security and sustainability of pension schemes as one of the four main aims of Member State collaboration on social policy. Since then the problems this involves have been the subject of the discussions of various European councils and several committees. 7 Based on the Lisbon summit in March 2000 and the new general strategic aim of creating a knowledge-based society, which was in part to be linked to the modernisation of social protection, the European Council in Gothenburg marked the commencement of the open method of coordination (and/or the open method of coordination (OCM) of old-age provision on 16 June 2001. A comprehensive concept was to include an integrated framework for ensuring dialogue on national strategies for the long-term security of appropriate, sustainable pensions (Communication for ‘an integrated approach to supporting national strategies for sustainable pensions’ (COM (2001) 362 final). 8 According to this Communication, the main aim of the OMC is to set common aims, implement these in policies at the national level and then monitor 6

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them regularly as part of a joint learning process based on jointly agreed and defined indicators and ‘benchmarks’. The national measures in pension policy were first assessed in the report on appropriate, sustainable pensions presented by the Commission and Council in March 2003. However, this assessment remained rather unspecific, merely confirming to all the Member States that they were aware of the problems of old-age pension schemes and that most of them had introduced the necessary steps towards reforming these. The Commission Communication of 2 July 2008 calling for ‘renewed en- 9 gagement for a social Europe: strengthening the open coordination method for social protection and social integration’ (OCM (2008) 418 final) describes the following development: The social OCM has been fundamentally reformed since its introduction in 2000. In 2005 three coordination processes (social integration, appropriate and sustainable old-age provision and sustainable first class health care) were grouped into a single OCM for social welfare. Common aims were set and updated by the European Council and their applicability confirmed at the 2008 Spring Meeting. The joint report of 2007 resulted in a holistic view of all the common social aims, which helped to improve the coherence and effectiveness of the policy. In addition, the new cycle contributed to more comprehensive analysis, thereby supporting the learning process regarding the key aims. The joint report of 2008 concentrated on child poverty, access to health benefits and changes in the need for long-term care. The Commission stressed in particular the problem of maintaining and/or 10 achieving long-term sustainable yet appropriate, secure pensions in the Member States in the light of demographic changes, e.g. longer life expectancy combined with changes as a result of the baby-boom generation moving from employment into retirement (cf. the ageing reports published every three years, especially the fourth report the ‘2012 Ageing Report – Economic and budgetary projections for the 27 EU Member States (2012-2060) and the current economic and financial crisis in Europe’). The Commission also stressed this problem in its annual growth reports for 2011 (COM (2011) 11 final of 12 January 2011) and 2012 (COM (2011) 815 final of 23 November 2011), and formulated the key issues concerning pension reforms. In the white paper ‘An agenda for appropriate, secure, sustainable pensions’ (COM (2012) 55 final of 16 February 2012) the Commission recommended: a) linking the retirement age to increased life expectancy; b) restricting access to early retirement and/or early retirement schemes and other early retirement options; c) extending working lives by means of better access to lifelong learning, adjusting workplaces to suit the needs of a more diverse workforce; increasing the employment opportunities for older workers and promoting an active, healthy old-age; d) equalising the retirement ages for men and women; and e) supporting additional old-age provision in order to raise retirement incomes. Rolf Schuler

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In the Social Protection Committee’s ‘report on the appropriateness of the pension sums in the period 2010-2050’ of 24 May 2012 (SPC/2012.5/2 a fin) the committee realises that, although there are no ‘general answers,’ to suit all, in the light of the demographic changes in Europe and against the background of the economic crisis, the Member States need to adjust their pension schemes regularly in terms of sustainability and appropriateness. The proposal is to extend working lives and counteract early retirement, in order to improve pension claims in the longer term (by means of flanking measures in employment policy for longer, healthier working lives), and to implement additional contributions to pension schemes and reduce gender-specific differences in employment, pay and working years. The intention is to further examine pension reforms systematically as part of the strategy for Europe 2020.

Article 50 General provisions (1) All the competent institutions shall determine entitlement to benefit, under all the legislations of the Member States to which the person concerned has been subject, when a request for award has been submitted, unless the person concerned expressly requests deferment of the award of old-age benefits under the legislation of one or more Member States. (2) If at a given moment the person concerned does not satisfy, or no longer satisfies, the conditions laid down by all the legislations of the Member States to which he/she has been subject, the institutions applying legislation the conditions of which have been satisfied shall not take into account, when performing the calculation in accordance with Article 52(1) (a) or (b), the periods completed under the legislations the conditions of which have not been satisfied, or are no longer satisfied, where this gives rise to a lower amount of benefit. (3) Paragraph 2 shall apply mutatis mutandis when the person concerned has expressly requested deferment of the award of old-age benefits. (4) A new calculation shall be performed automatically as and when the conditions to be fulfilled under the other legislations are satisfied or when a person requests the award of an old-age benefit deferred in accordance with paragraph 1, unless the periods completed under the other legislations have already been taken into account by virtue of paragraph 2 or 3. Article 45 Reg. No. 987/09 Claim for benefits (1) In order to receive benefits under type A legislation under Article 44(2) of the basic Regulation, the claimant shall submit a claim to the institution of the Member State, whose legislation was applicable at the time when the incapacity for work occurred followed by invalidity or the aggravation of such invalidity, or to the institution of the place of residence, which shall forward the claim to the first institution. (2) If sickness benefits in cash have been awarded, the expiry date of the period for awarding these benefits shall, where appropriate, be considered as the date of submission of the pension claim. (3) In the case referred to in Article 47(1) of the basic Regulation, the institution with which the person concerned was last insured shall inform the institution which initially paid the benefits of the amount and the date of commencement of the benefits under the applicable legislation. From that date benefits due before aggravation of the invalidity shall be withdrawn or reduced to the supplement referred to in Article 47(2) of the basic Regulation. (4) In situations other than those referred to in paragraph 1, the claimant shall submit a claim to the institution of his place of residence or to the institution of the last Member State whose legislation was applicable. If the person concerned was not, at any time, subject to the legislation applied by the institution of the place

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Article 50 of residence, that institution shall forward the claim to the institution of the last Member State whose legislation was applicable. (5) The date of submission of the claim shall apply in all the institutions concerned. (6) By way of derogation from paragraph 5, if the claimant does not, despite having been asked to do so, notify the fact that he has been employed or has resided in other Member States, the date on which the claimant completes his initial claim or submits a new claim for his missing periods of employment or/and residence in a Member State shall be considered as the date of submission of the claim to the institution applying the legislation in question, subject to more favourable provisions of that legislation. Article 46 Reg. No. 987/09 Certificates and information to be submitted with the claim by the claimant (1) The claim shall be submitted by the claimant in accordance with the provisions of the legislation applied by the institution referred to in Article 45(1) or (4) of the implementing Regulation and be accompanied by the supporting documents required by that legislation. In particular, the claimant shall supply all available relevant information and supporting documents relating to periods of insurance (institutions, identification numbers), employment (employers) or self-employment (nature and place of activity) and residence (addresses) which may have been completed under other legislation, as well as the length of those periods. (2) Where, in accordance with Article 50(1) of the basic Regulation, the claimant requests deferment of the award of old-age benefits under the legislation of one or more Member States, he shall state that in his claim and specify under which legislation the deferment is requested. In order to enable the claimant to exercise that right, the institutions concerned shall, upon the request of the claimant, notify him of all the information available to them so that he can assess the consequences of concurrent or successive awards of benefits which he might claim. (3) Should the claimant withdraw a claim for benefits provided for under the legislation of a particular Member State, that withdrawal shall not be considered as a concurrent withdrawal of claims for benefits under the legislation of other Member States. Article 47 Reg. No. 987/09 Investigation of claims by the institutions concerned A. ‘contact institution’ (1) The institution to which the claim for benefits is submitted or forwarded in accordance with Article 45(1) or (4) of the implementing Regulation shall be referred to hereinafter as the ‘contact institution’. The institution of the place of residence shall not be referred to as the contact institution if the person concerned has not, at any time, been subject to the legislation which that institution applies. In addition to investigating the claim for benefits under the legislation which it applies, this institution shall, in its capacity as contact institution, promote the exchange of data, the communication of decisions and the operations necessary for the investigation of the claim by the institutions concerned, and supply the claimant, upon request, with any information relevant to the Community aspects of the investigation and keep him/her informed of its progress. B. Investigation of claims under the legislations of Type A in accordance with Article 44 of the basic regulation. (2) In the case referred to in Article 44(3) of the basic Regulation, the contact institution shall send all the documents relating to the person concerned to the institution with which he was previously insured, which shall in turn examine the case. (3) Articles 48 to 52 of the implementing Regulation shall not be applicable to the investigation of claims referred to in Article 44 of the basic Regulation. C. Investigation of other claims (4) In situations other than those referred to in paragraph 2, the contact institution shall, without delay, send claims for benefits and all the documents which it has available and, where appropriate, the relevant documents supplied by the claimant to all the institutions in question so that they can all start the investigation of the claim concurrently. The contact institution shall notify the other institutions of periods of insurance or residence subject to its legislation. It shall also indicate which documents shall be submitted at a later date and supplement the claim as soon as possible. (5) Each of the institutions in question shall notify the contact institution and the other institutions in question, as soon as possible, of the periods of insurance or residence subject to their legislation. (6) Each of the institutions in question shall calculate the amount of benefits in accordance with Article 52 of the basic Regulation and shall notify the contact institution and the other institutions concerned of its decision, of the amount of benefits due and of any information required for the purposes of Articles 53 to 55 of the basic Regulation. (7) Should an institution establish, on the basis of the information referred to in paragraphs 4 and 5 of this Article, that Article 46(2) or Article 57(2) or (3) of the basic Regulation is applicable, it shall inform the contact institution and the other institutions concerned.

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Part 2: Regulation (EC) No 883/2004 Article 48 Reg. No. 987/09 Notification of decisions to the claimant (1) Each institution shall notify the claimant of the decision it has taken in accordance with the applicable legislation. Each decision shall specify the remedies and periods allowed for appeals. Once the contact institution has been notified of all decisions taken by each institution, it shall send the claimant and the other institutions concerned a summary of those decisions. A model summary shall be drawn up by the Administrative Commission. The summary shall be sent to the claimant in the language of the institution or, at the request of the claimant, in any language of his choice recognised as an official language of the Community institutions in accordance with Article 290 of the Treaty. (2) Where it appears to the claimant following receipt of the summary that his rights may have been adversely affected by the interaction of decisions taken by two or more institutions, the claimant shall have the right to a review of the decisions by the institutions concerned within the time limits laid down in the respective national legislation. The time limits shall commence on the date of receipt of the summary. The claimant shall be notified of the result of the review in writing.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Scope of Art. 50 et seq.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Europe-wide effects of submitting claims and the European determination procedure for payment (paragraph 1 in conjunction with Art. 45-48 Reg. No. 987/2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Provisional or advance payments according to Art. 50 Reg. No. 987/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Staggered fulfilment of the respective payment criteria . . . . . . . . . . . . .

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I. Spirit and Purpose

Editorially revised, paragraph 1 of the provision corresponds to Art. 44 (2) Reg. No. 1408/71, with amended content paragraphs 2-4 to Art. 49 (1-2) Reg. No. 1408/71. It contains the Europe-wide effect of pension claims and instructions on calculating those which at staggered intervals satisfy the respective payment criteria according to the respective Member State provisions in accordance with pension law. In substance, the provision on pension claims (claims for payment of statutory pension insurance) is limited and hence not applicable to claims for statutory early retirement provision if this is not in the form of unemployment benefits (see Art. 1(x). 2 Forerunners of the regulations were Art. 27 and 28 Reg. No. 3. Art. 44 (2) was amended by Reg. No. 2595/77 of the EC Council with effect from 26 November 1977. Art. 44 (3) was amended by Reg. No. 1606/98 of the EC Council with effect from 29 June 1998 (OJ EC of 25 July 1998 L 209) with effect from 25 October 1998 (cf. also Art. 95 c). 1

II. Commentary 1. Scope of Art. 50 et seq. 3

Even without explicit regulation, in the new regulation the provisions of Art. 50 et seq. are only applicable to people to whom (based on the freedom of movement they have exercised) the legal provisions regarding the risks of oldage and death (possibly invalidity) of more than one Member State applied.

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In fact, this necessary relation to European law requires that the pension laws 4 of two or more Member States have had substantive application. Therefore, according to the (national) pension law of more than one Member State periods of insurance (as understood in Art. 1(t), employment (as understood in Art. 1(u) or residence (as understood in Art. 1(v) have to have been aggregated and/or qualify. (Originally) external periods could also be taken into account under certain circumstances, such as in the event of an insurance burden according to Convention rules or in the event of periods of absence. For how long is not important. The legal status of people with uniform pension biographies in the Member 5 States, who were only subject to the pension statute of one Member State as understood above, is accordingly based on the respective pension law of the competent Member State. 2. Europe-wide effects of submitting claims and the European determination procedure for payment (paragraph 1 in conjunction with Art. 45-48 Reg. No. 987/2009)

Art. 50 (1) Europeanises the legally effective submission of claims in a Mem- 6 ber State, in that the introduction of the determination procedure for payment is required in Member States whose pension laws applied to a claimant. According to Art. 45 (4) sentence 1 Reg. No. 987/2009 the claimant can choose to submit a claim either to the competent institution of the claimant’s place of residence or to the competent institution of the Member State where said claimant was last employed; even a claim submitted to the ‘non-competent’ institution of a Member State is still just as effective. The competent institution of the Member State where said claimant was last employed assumes the role of contact competent institution (see Reg. No. 9). This means that even legally effective pension claims submitted in another Member State (routinely to the competent institution in the State of residence) are effective in terms of all the procedures and, if applicable, substantive law, even if at the time the claim is submitted not all the basic requirements according to the legal provisions of the other Member State have been met (see CJEU, Case C-108/75 (Balsamo), EU:C:1976:38). Without the submission of a restrictive declaration (second sentence) this principle of the Europe-wide effects of submitting pension claims must also apply to anyone who is entitled to do so. If necessary the competent institution of the State of residence will forward a claim for payment submitted to it to the competent institution of the Member State whose legal provisions last applied to the claim submitted in accordance with Art. 45 (4) Reg. No. 987/2009 (cf. law hitherto, CJEU, Case C-287/92 (Toosey), EU:C:1994:27). However, the Europe-wide effects of submitting claims and the Europe-wide determination procedure for payment do not justify a uniform administrative procedure that could enable the attribution of misconduct to the institution of another Member State, which is responsible for insurance, (e.g. the late forwarding of a pension claim).

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The principle of the Europe-wide effects of submitting pension claims is binding on all the competent institutions involved in terms of the time the claim is submitted (Art. 45 (4) Reg. No. 987/2009). Confirmed in CJEU case law for rules on procedure in the law to date, the principle is now restricted by means of Art. 45 (6) Reg. No. 987/2009 in a case where the claimant does not declare relevant periods spent in other Member States, ‘even on request’. In relation to the competent institutions of this Member State, the claim only becomes effective if it is complete. Therefore the claimant is duty-bound to give all the information concerning aggregated pension periods and, if the claimant neglects this duty, he or she must bear the consequences of late submission according to the provisions of the pension law of the respective Member State. As understood in this provision, a corresponding question in the respective claim form must also be regarded as a request for declaring pension periods from external Member States. The required information and documents to be submitted are listed in Art. 46 (1) Reg. No. 987/2009; however, merely declaring the pension periods from external Member States must be sufficient to render a claim effective throughout Europe. 8 The effects of the claim can be restricted as regards claims for the payment of retirement provision against individual Member States, by explicit declarations in the submitted claim (restriction of claims, see also Art. 46 (2) Reg. No. 987/2009). This opens up the possibility of exercising corresponding rights according to the legal provisions of Member States or avoiding any negative effects of the premature submission of claims. 7

3. Provisional or advance payments according to Art. 50 Reg. No. 987/2009

Procedure for payment on the European level aims at accelerating the process. However, viewed overall, the process is by nature more protracted than the separate, individual procedures of the Member States. All the more important therefore is the duty of the competent institutions to ensure the acceptance of intra-state provisional payments of pension claims and/or inter-state advance payments of pension claims, even before all sides have concluded the determination procedure for payment according to the provisions of Art. 50 Reg. No. 987/2009. This duty is obligatory and legally enforceable (CJEU, Case C-53/79 (Damiani), EU:C:1980:44). 10 The respective competent institution has a duty to pay the expected amount of (partial) pensions in advance for any pension claim given – whether this involves the separate application of its legal provisions (Art. 50(1) Reg. No. 987/2009 replicated in Art. 52) or taking into account periods from external Member States (Art. 50(2) Reg. No. 987/2009). 9

4. Staggered fulfilment of the respective payment criteria 11

With amendments to their contents, para. 2-4 have replaced Art. 49(1) and (2) Reg. No. 1408/71. They contain modifications to the calculation of pensions un344

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der Community law in the event that a claim for payment is not upheld in all the Member States according to whose legal provisions insurance periods were aggregated (para. 2) or not realised due to a restriction on the claim (para. 3). In these cases, periods from the corresponding Member States remain calculated in accordance with Community law according to Art. 52 Abs. 1(a)(b) according to the favourability principle are not taken into account, i.e. they are only, but then always, considered if they do not result in lower payments. The rule is based on the premise that payment is calculated according to 12 Art. 52 (1)(a)(b) (stand-alone payment, theoretical amount/partial pension) without consideration of periods from the Member State or States, according to whose legal provisions the payment criteria have not been met or proposed, if applicable that it produces a more favourable pro-rata proportion or proratarisation is dispensed with altogether, which can result in a higher payment. Any periods from external Member States that are not paying States, which must be taken into account to support the claim according to Art. 6 and 51, must definitely be considered in the calculation of the amount. If a person entitled to a pension claims initially deferred retirement provision 13 or if the criteria for these payments have (now) been met, according to para. 4, the payments must be recalculated ex officio.

Article 51 Special provisions on aggregation of periods (1) Where the legislation of a Member State makes the granting of certain benefits conditional upon the periods of insurance having been completed only in a specific activity as an employed or self-employed person or in an occupation which is subject to a special scheme for employed or self-employed persons, the competent institution of that Member State shall take into account periods completed under the legislation of other Member States only if completed under a corresponding scheme or, failing that, in the same occupation, or where appropriate, in the same activity as an employed or self-employed person. If, account having been taken of the periods thus completed, the person concerned does not satisfy the conditions for receipt of the benefits of a special scheme, these periods shall be taken into account for the purposes of providing the benefits of the general scheme or, failing that, of the scheme applicable to manual or clerical workers, as the case may be, provided that the person concerned had been affiliated to one or other of those schemes. (2) The periods of insurance completed under a special scheme of a Member State shall be taken into account for the purposes of providing the benefits of the general scheme or, failing that, of the scheme applicable to manual or clerical workers, as the case may be, of another Member State, provided that the person concerned had been affiliated to one or other of those schemes, even if those periods have already been taken into account in the latter Member State under a special scheme. (3) Where the legislation or specific scheme of a Member State makes the acquisition, retention or recovery of the right to benefits conditional upon the person concerned being insured at the time of the materialisation of the risk, this condition shall be regarded as having been satisfied if that person has been previously insured under the legislation

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Part 2: Regulation (EC) No 883/2004 or specific scheme of that Member State and is, at the time of the materialisation of the risk, insured under the legislation of another Member State for the same risk or, failing that, if a benefit is due under the legislation of another Member State for the same risk. The latter condition shall, however, be deemed to be fulfilled in the cases referred to in Article 57. Article 53 Reg. No. 987/09 Coordination measures in Member States (1) Without prejudice to Article 51 of the basic Regulation, where national legislation includes rules for determining the institution responsible or the scheme applicable or for designating periods of insurance to a specific scheme, those rules shall be applied, taking into account only periods of insurance completed under the legislation of the Member State concerned. (2) Where national legislation includes rules for the coordination of special schemes for civil servants and the general scheme for employed persons, those rules shall not be affected by the provisions of the basic Regulation and of the implementing Regulation.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Consideration of qualifying periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Equality of current pension insurance membership (para. 3). . . . . . . . 3. Child rearing periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 2 7 8

I. Spirit and Purpose 1

The provision supplements the general rule on the aggregation of periods in Art. 6 and, as editorially revised, replaces Art. 45 Reg. No. 1498/71. It regulates the treatment of insurance periods, for which the respective pension law of the Member States sets certain requirements and/or for which there is a special scheme. II. Commentary 1. Consideration of qualifying periods

For special schemes in accordance with Member State pension law for those employed or self-employed, para. 1, sentence 1 stipulates that equal consideration of periods from external Member States be made a concrete reality, to the effect that the stipulation for this kind of consideration within this special scheme is limited to the periods aggregated in comparable special schemes of other Member States or, if there are no such schemes, in actually comparable professions and/or occupations or gainful self-employed activities. The formal approach of Art. 6 to the general consideration of periods from external Member States (see Art. 6 Reg. No. 6) is hereby abandoned and consideration is now linked to the consideration of periods having aspects which are factually equal in terms of qualifying circumstances. 3 Special schemes for miners exist e.g. in Belgium, Germany, France, Italy, Luxembourg, Holland and Spain. 4 If periods from external Member States in a special scheme (e.g. for miners) cannot be aggregated due to the lack of national periods in such a scheme, or if the special national requirements for claims have not been met even when such 2

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periods from external Member States are considered, these periods are to be considered in general pension schemes (para. 2 sentence 2). The same applies to periods from other special schemes of external Member States, which are unknown in the national pension insurance law. Since the inclusion of the self-employed in the special schemes for the self- 5 employed in the regulation on coordination, the consideration of periods from external Member States has also been regulated. The provision does not affect self-employed people who are not insured or provided for by general pension schemes. Instead it requires separate insurance schemes for the self-employed, such as special schemes for self-employed farmers or those in organisations providing compulsory retirement schemes for members of the registered liberal professions (doctors, dispensing chemists, architects, notaries public, lawyers, tax consultants and/or tax advisers, veterinary surgeons, auditors, dentists, psychological psychotherapists and engineers or civil engineers (see Art. 3). In 2004 there were professional associations in 11 of the present Member 6 States (cf. the documents of the congress on the social security of European lawyers, Council of Bars and Law Societies of Europe (publ.), 2004, pp. 13 ff.). The Directive 647/2005 of 13 April 2005 (OJ L 117/1) integrated the German and Austrian special schemes for the self-employed (in anticipation of Directive 883/2004) into the material scope of Reg. No. 1408/71 (some rules concerning the calculation of payments from capital-covered schemes were amended and added in Annex VI, cf. Spiegel, ZIAS 2006, 86, 109). Following the increased cross-border mobility of individual occupational groups in the registered liberal professions, the previous legal position was increasingly felt to be unsatisfactory. The amendment required the German professional associations to align their occupational scheme statutes, e.g. by amending the entry age limits, in order to comply with European law. In the end very few occupational association pension schemes (those in France, Spain and Cyprus) were subject to the proviso in former Annex II (I.) Reg. No. 1408/71. Directive 883/2004 finally concluded the inclusion of the schemes of provision of the professional associations in the coordination of European social law; from then on exclusion along the lines of former Annex II (I.) Reg. No. 1408/71 was impossible. In the Directive 883/2004 exceptions to the calculation of payments in cases, in which according to Art. 52 (4) pro rata calculation is dispensed with (Annex VIII part 1) and/or Art. 52 (5) applies (Annex VIII part 2), were only made for the Austrian professional associations (see the commentary on Art. 52 (4), (5)). 2. Equality of current pension insurance membership (para. 3)

Paragraph 3 (till now Art. 45 (5) Reg. No. 1408/71) mainly concerns Dutch 7 law, according to which benefits for the incapacity for work and survivors’ benefits require those entitled to such have been insured in accordance with Dutch law at the time they first became incapable of work. In this context the rule contains a case of equality (formulated as a notional case) with current pension inRolf Schuler

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surance membership (or the drawing of a payment for the same insurance case) in accordance with the legal provisions of other Member States according to the procedure cited in Annex XI. 3. Child rearing periods 8

Concerning the consideration of child rearing periods, see Art. 52 Reg. below.

Article 52 Award of benefits (1) The competent institution shall calculate the amount of the benefit that would be due: (a) under the legislation it applies, only where the conditions for entitlement to benefits have been satisfied exclusively under national law (independent benefit); (b) by calculating a theoretical amount and subsequently an actual amount (pro-rata benefit), as follows: (i) the theoretical amount of the benefit is equal to the benefit which the person concerned could claim if all the periods of insurance and/or of residence which have been completed under the legislations of the other Member States had been completed under the legislation it applies on the date of the award of the benefit. If, under this legislation, the amount does not depend on the duration of the periods completed, that amount shall be regarded as being the theoretical amount; (ii) the competent institution shall then establish the actual amount of the pro-rata benefit by applying to the theoretical amount the ratio between the duration of the periods completed before materialisation of the risk under the legislation it applies and the total duration of the periods completed before materialisation of the risk under the legislations of all the Member States concerned. (2) Where appropriate, the competent institution shall apply, to the amount calculated in accordance with subparagraphs 1(a) and (b), all the rules relating to reduction, suspension or withdrawal, under the legislation it applies, within the limits provided for by Articles 53 to 55. (3) The person concerned shall be entitled to receive from the competent institution of each Member State the higher of the amounts calculated in accordance with subparagraphs 1(a) and (b). (4) Where the calculation pursuant to paragraph 1(a) in one Member State invariably results in the independent benefit being equal to or higher than the pro rata benefit, calculated in accordance with paragraph 1(b), the competent institution shall waive the pro rata calculation, provided that: (i) such a situation is set out in Part 1 of Annex VIII; (ii) no legislation containing rules against overlapping, as referred to in Articles 54 and 55, is applicable unless the conditions laid down in Article 55(2) are fulfilled; and (iii) Article 57 is not applicable in relation to periods completed under the legislation of another Member State in the specific circumstances of the case. (5) Notwithstanding the provisions of paragraphs 1, 2 and 3, the pro rata calculation shall not apply to schemes providing benefits in respect of which periods of time are of no relevance to the calculation, subject to such schemes being listed in part 2 of Annex 348

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The actual amount of the benefit, calculated in accordance with Article 52(1)(b) of the basic Regulation, shall be increased by the amount corresponding to periods of voluntary or optional continued insurance. (3) The institution of each Member State shall calculate, under the legislation it applies, the amount due corresponding to periods of voluntary or optional continued insurance which, under Article 53(3)(c) of the basic Regulation, shall not be subject to another Member State’s rules relating to withdrawal, reduction or suspension. Where the legislation applied by the competent institution does not allow it to determine this amount directly, on the grounds that that legislation allocates different values to insurance periods, a notional amount may be established. The Administrative Commission shall lay down the detailed arrangements for the determination of that notional amount. Article 44 Reg. No. 987/09 Taking into account of child raising-periods (1) For the purposes of this Article, ‘child-raising period’ refers to any period which is credited under the pension legislation of a Member State or which provides a supplement to a pension explicitly for the reason that a person has raised a child, irrespective of the method used to calculate those periods and whether they accrue during the time of child-raising or are acknowledged retroactively. (2) Where, under the legislation of the Member State which is competent under Title II of the basic Regulation, no child-raising period is taken into account, the institution of the Member State whose legislation, according to Title II of the basic Regulation, was applicable to the person concerned on the grounds that he or she was pursuing an activity as an employed or self-employed person at the date when, under that legislation, the child-raising period started to be taken into account for the child concerned, shall remain responsible for taking into account that period as a child-raising period under its own legislation, as if such child-raising took place in its own territory. (3) Paragraph 2 shall not apply if the person concerned is, or becomes, subject to the legislation of another Member State due to the pursuit of an employed or self-employed activity. Article 50 Reg. No. 987/09 Provisional instalments and advance payment of benefit (1) Notwithstanding Article 7 of the implementing Regulation, any institution which establishes, while investigating a claim for benefits, that the claimant is entitled to an independent benefit under the applicable legislation, in accordance with Article 52(1)(a) of the basic Regulation, shall pay that benefit without delay. That payment shall be considered provisional if the amount might be affected by the result of the claim investigation procedure. (2) Whenever it is evident from the information available that the claimant is entitled to a payment from an institution under Article 52(1)(b) of the basic Regulation, that institution shall make an advance payment, the amount of which shall be as close as possible to the amount which will probably be paid under Article 52(1) (b) of the basic Regulation. (3) Each institution which is obliged to pay the provisional benefits or advance payment under paragraphs 1 or 2 shall inform the claimant without delay, specifically drawing his attention to the provisional nature of the measure and any rights of appeal in accordance with its legislation. Article 51 Reg. No. 987/09 New calculation of benefits (1) Where there is a new calculation of benefits in accordance with Articles 48(3) and (4), 50(4) and 59(1) of the basic Regulation, Article 50 of the implementing Regulation shall be applicable mutatis mutandis. (2) Where there is a new calculation, withdrawal or suspension of the benefit, the institution which took the decision shall inform the person concerned without delay and shall inform each of the institutions in respect of which the person concerned has an entitlement. Article 52 Reg. No. 987/09 Measures intended to accelerate the pension calculation process (1) In order to facilitate and accelerate the investigation of claims and the payment of benefits, the institutions to whose legislation a person has been subject shall: (a) exchange with or make available to institutions of other Member States the elements for identifying persons who change from one applicable national legislation to another, and together ensure that those iden-

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Part 2: Regulation (EC) No 883/2004 tification elements are retained and correspond, or, failing that, provide those persons with the means to access their identification elements directly; (b) sufficiently in advance of the minimum age for commencing pension rights or before an age to be determined by national legislation, exchange with or make available to the person concerned and to institutions of other Member States information (periods completed or other important elements) on the pension entitlements of persons who have changed from one applicable legislation to another or, failing that, inform those persons of, or provide them with, the means of familiarising themselves with their prospective benefit entitlement. (2) For the purposes of applying paragraph 1, the Administrative Commission shall determine the elements of information to be exchanged or made available and shall establish the appropriate procedures and mechanisms, taking account of the characteristics, administrative and technical organisation, and the technological means at the disposal of national pension schemes. The Administrative Commission shall ensure the implementation of those pension schemes by organising a follow-up to the measures taken and their application. (3) For the purposes of applying paragraph 1, the institution in the first Member State where a person is allocated a Personal Identification Number (PIN) for the purposes of social security administration should be provided with the information referred to in this Article.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Comparative calculation for pension requirements that have been met on a purely intrastate basis (para. 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Pension calculation of pro-rata pensions under Community law and according to what is known as the pro-rata-temporis procedure (para. 1(b)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) The aim of coordination, and the regulatory principle . . . . . . . . . . . b) Calculation of a theoretical amount (para. 1(b)(i)). . . . . . . . . . . . . . . aa) General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . bb) Scope and eligibility of periods from external Member States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Calculation of the actual amount of a pro-rata pension (para. 1(b)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Rule on a maximum amount (para. 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Exceptions regarding the calculation of pro-rata pensions (paragraphs 4 and 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. The special rule concerning the consideration of child-rearing periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 5 5 11 11 15 15 18 20 22 24 26

I. Spirit and Purpose

Editorially revised, Art. 52 replaces Art. 46 Reg. No. 1408/71. This has replaced Art. 28 Reg. No. 3 subject to consideration of CJEU case law relating thereto (above all Case 191/73 (Niemann), EU:C:1974:58), without altering the basic structure of pension calculation in accordance with Community law. Several amendments have been made to the overlapping rule, most recently following the new version of the whole of Chapter 3 of Reg. No. 1408/71, the amendment to Art. 46 Reg. No. 574/72 under Reg. No. 1248/92 of 30 April 1992 (OJ (EC) L 136/7). Directive 988/2009 (OJ L 284/43 of 16 September 2009) amended para. 4 and added para. 5. 2 The regulatory task of Art. 48 TFEU (= Art. 42 EC) stipulates among other things the aggregation of all the periods according to intrastate legal provisions, which are to be considered in the calculation of (pension) provision, as exemplary content of the coordination of European social law. Recital 28 of the Di1

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rective defines this regulatory task specifically, to the effect that the amount of a pension to be set is “that which is calculated in accordance with the method used for aggregation and pro-rata calculation and guaranteed by Community law, if applying the national legal provisions, including their rules concerning reduction, suspension or withdrawal, proves to be less favourable than the aforementioned method.” Art. 52 contains the essential rules for the required “calculation of pensions "under Community law”. In relation to purely national “independent” pension calculation the favourability principle (para. 3) also applies here. Art. 52 does not contain any rules for independent pension calculation in the 3 sense of a total European pension, instead the stipulated pension calculation under Community law contents itself with the insurance and/or pension burden of the Member States concerned and their calculation in accordance with the law of the respective Member State. Member State law on pension calculation is merely modified according to what is known as the pro-rata-temporis principle, in that first a theoretical amount and then a pro-rata pension is calculated (para. 1(b). The previous rule on a maximum amount is now rescinded and the task of 4 preventing the unjustifiable overlapping of benefits in accordance with CJEU case law and the responsibility for this is primarily transferred to the pension provisions of the Member States (Recitals 30, 31). The Directive assumes Member State anti-overlapping rules, including those extending to other countries if applicable, and has been given new coordination rules for this (Art. 53-55). II. Commentary 1. Comparative calculation for pension requirements that have been met on a purely intrastate basis (para. 1)

According to para. 1 and 2 there is a marked difference as regards coordinat- 5 ing pension calculations, depending on whether the person entitled to a pension has met the pension criteria, i.e. aggregated the respective, relevant waiting periods, by means of solely intrastate insurance periods or taking into account only periods from external states according to Art. 45. According to para. 1, comparative calculation must be made if the pension requirements have been met on a purely national basis. Accordingly, a pension must firstly be calculated solely in accordance with 6 national pension law, i.e. above all, only taking into account the periods that can be credited under the national pension law of the respective state (para. 1(a) independent pensions). In this case all the (otherwise usual) “administrative practices” should also be considered (CJEU, Case C-342/88 (Spits), EU:C: 1990:235; CJEU, Case C-5/91 (Di Prinzo)). (Only) the anti-overlapping rules under national law should be applied to the calculation of this type of independent pension.

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Secondly, the pension should then be calculated as a “pro-rata pension” under Community law and according to para. 1(b) (see Reg. 13 et seq.). When this prorata (proratarised) pension is calculated, the intended anti-overlapping provisions of a Member State according to Art. 54 (1) cannot apply to the overlapping of the same type of pensions. 8 This means that, in accordance with the provisions in paragraph 3, the person concerned is entitled to a higher (partial) pension from the responsible body of each Member State, if applicable, taking into account the national rules on the protection of ownership and subject to the application of the provisions concerning reduction, suspension or withdrawal (CJEU, Case C-31/92 (Larsy), EU:C: 1993:340). 9 If the pension claim is only upheld when the periods aggregated in external Member States are taken into account, the pension is calculated according to para. 1(b). 10 According to para. 4 pension calculation under Community law according to para. 1(b) can (only) be waived if this cannot theoretically result in a higher partial pension than the result of a calculation based on purely national legal provisions (cf. also CJEU, Case C-113/92 (Fabrizii), Case C-114/92 (Neri) and Case C-156/92 (Del Grosso), EU:C:1993:930). Therefore the criterion for disregarding pension calculation under Community law is the fact that the rules on overlapping according to Art. 54 or Art. 55 either do not or, in the case of Art. 55, only stipulate that “pensions of a different type” (e.g. accident insurance benefits as opposed to pension insurance benefits) can only be considered on a pro-ratatemporis basis. 7

2. Pension calculation of pro-rata pensions under Community law and according to what is known as the pro-rata-temporis procedure (para. 1(b)) a) The aim of coordination, and the regulatory principle

The aim of coordination is to offset, in other words prevent any disadvantages as regards “migrant worker biographies” (including) those due to the aggregation of all the Member State pension-relevant periods: hence Art. 48 TFEU (= Art. 42 EC) is expressly extended to cover pension calculation. However, this requires or relates to the obligation to export pensions. Therefore, in the context of pension calculation, the requirement to take into account pension periods from external Member States cannot be so widely interpreted to effect reimbursement for these periods under pension law. This would lead to unjustifiable overlapping. 12 In the context of pension calculation, the requirement to offset any disadvantages necessitates taking into account pension periods from external Member States, since the pension burden (as the CJEU refers to it) would otherwise be reduced in comparison to purely national circumstances and/or homogeneous in11

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surance biographies. This is achieved by means of a two-stage pro-rata-temporis procedure in para. 1(b): Firstly, a theoretical pension amount is calculated and (in each case) assumed 13 to be that of a purely national pension biography, i.e. all the periods from external Member States should be taken into account as if they were aggregated under national law and therefore represented periods that could be reimbursed (para. 1, lit. b), no. i)). Secondly, the amount that is actually to be paid, the “actual amount of the pro-rata pension” is then calculated from the hypothetical total pension, which has been determined in this way, in relation to the insurance periods aggregated in Member States before the risk materialised. This means that this pro-rata-temporis pension scheme does not result in the 14 alignment of the levels of pensions in the Member States, and that the existing legal and financial differences remain. b) Calculation of a theoretical amount (para. 1(b)(i)) aa) General information

The theoretical amount as a notional total pension is calculated under the re- 15 spective Member State pension law. The only stipulation is that insurance and residence periods also be taken into account, as if these had been aggregated according to the respective applicable legal provisions of said Member State. Periods from external Member States should also be taken into account if these periods did not have to be taken into account under the national law of the competent authority (CJEU, Case C-113/92 (Fabrizii), Case C-114/92 (Neri) and Case C-156/92 (Del Grosso), EU:C:1993:930). The calculation should produce the highest amount, to claim which the person concerned would be entitled if this person had aggregated all the qualifying periods in the respective Member State (CJEU, Case C-30/04 (Koschitzki), EU:C:2005:492). The periods from external Member States (at any rate those for contributions) are assessed according to Art. 56 para. 1(c) solely according to national values. The Member States are not permitted to introduce special provisions for de- 16 termining the theoretical amount of a pension, on the basis of which the theoretical amount thus calculated will be reduced compared to the amount in accordance with the general provisions (CJEU, Case C-274/81 (Besem), EU:C: 1982:315). The notional treatment of periods from external Member States as national 17 periods described here results in these also becoming relevant for other individual factors regarding national pension calculation. bb) Scope and eligibility of periods from external Member States

What has already been said about Art. 51 applies to the scope of the periods 18 from external Member States to be taken into account. The respective law of the Member State is crucial in terms of eligibility for consideration; the decisions of

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the respective external competent institution are binding as regards the scope of the periods to be considered. 19 Contribution, residence and equivalent periods from external Member States should be assigned to pension calculation under national pension law, and to the types of periods that can be distinguished under this if applicable. In certain circumstances recourse may have to be made to the legal provisions under this, which were in force during the aggregation of these periods (CJEU, Case C-285/82 (Derks), EU:C:1984:42). c) Calculation of the actual amount of a pro-rata pension (para. 1(b)(ii)

The (only) purpose of calculation according to para. 1(b)(ii) is to distribute “the respective pension burden” among the competent institutions of the Member States concerned in relation to the length of the periods aggregated in each of these Member States before the risk materialised (CJEU, Case C-793/79 (Menzies), EU:C:1980:172). The only exception is in the case of periods lasting less than a year, for which, according to what is known as the mini period rule, whereby under the additional requirements of Art. 57 para. 1 these are excluded from partial pension calculation, meaning they are reimbursed as national periods. 21 To determine the payable amount of a pro-rata pension under Community law, the calculated theoretical amount (more precisely, the pension points on which this is based) is divided in relation to the national pension insurance periods before the risk materialised and all the creditable, aggregated periods in all the Member States before the risk materialised. 20

3. Rule on a maximum amount (para. 3) 22

The present version of para. 3 is based on the CJEU case law on the previously standardised rule on a maximum amount and waives any restriction of a theoretical amount. The pension amount calculated according to purely national legal provisions, the independent pension, if applicable subject to consideration of all the anti-overlapping provisions of the pension law of the respective Member State (regarding previous law, see CJEU, Case C-90/91 (Crescenzo) and Case C-91/91 (Casagrande), EU:C:1992:258), are compared to the actual amount calculated under Community law, the pro-rata pension, which must also if applicable be calculated subject to consideration of anti-overlapping provisions (paragraph 2). Excluded is a case in which a person was employed in two Member States in the same period and paid old-age pension insurance contributions in both Member States during this period (CJEU, Case C-31/92 (Larsy), EU:C: 1993:340). In this case involving more than one set of contributions any reduction would be unjustifiable. Such a comparison should result in payment of the higher amount (CJEU, Case C-107/00 (Insalaca), EU:C:2002:147).

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Article 52

The principles of Art. 53-55 must be complied with, so that the anti-overlap- 23 ping rules of more than one Member State involved, which must be applied, are not applied at the same time. 4. Exceptions regarding the calculation of pro-rata pensions (paragraphs 4 and 5)

Four conditions for waiving comparative calculations are cited in para. 4 in 24 accordance with para. 1(b), if and/or, according to which, the independent pension (calculated according to para. 1(a)) is always as much as or more than the pro-rata pension. According to para. 5, pro-rata calculation is omitted in schemes in which pen- 25 sions are not calculated according to length of time or periods. The regulators have introduced this rule in response to particular problems concerning capitalcovered pension schemes calculated according to the pro-rata-temporis method. The pensions in these schemes are always granted as pensions calculated as independent payments of the Member State concerned; comparative calculation with pro-rata pensions in accordance with para. 1(b) is not necessary (see Spiegel, in: Jorens (publ.), 50 Jahre Koordinierung der sozialen Sicherheit (Fifty years of social security coordination) pp. 210, 232). However, these schemes must be listed in Annex VIII Part 2 (see the printed Annex VIII according to Art. 52). 5. The special rule concerning the consideration of child-rearing periods

The implementing Regulation in Art. 44 introduced the rule on the coordina- 26 tion of child-rearing periods under European law. This included a legal definition of child-rearing periods and a regulation on responsibility for pensions for these periods; hence the conflict-of-law content of the rule that became attached to this regulation Art. 44 can only be applied to periods after the Regulation came into force on 1 May 2010 (CJEU, Case C-522/10 (Reichel-Albert), EU:C: 2012:475). Under the previous applicability of Reg. No. 1408/71, the CJEU decided issues concerning the aggregation of child-rearing periods according to Art. 21 TFEU (see Case C-135/99 (Elsen), EU:C:2000:647; Case C-28/10 P (Bayramoglu), EU:C:2010:493). According to the legal definition of child-rearing periods in para. 1 this regu- 27 lation concerns periods, which are credited in accordance with the law of the respective Member State, i.e. considered (granted) under the pension law thereof, because a person has raised a child during this time. This time can now be granted either to increase a pension or as a pension supplement. Defining the group of people who are eligible for the consideration of such child-rearing periods remains subject to the law of the respective Member State, as do any additional conditions on the consideration in terms of aggregatability and duration. Para. 2 regulates conflict-of-law responsibility for child-rearing periods (and 28 therefore the duty to pay for these periods) from the point of view of the most Rolf Schuler

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favourable. The Member State whose duty it is to consider and therefore pay for these periods is the Member State responsible according to the general conflictof-law rules in Art. 11 et seq. if in a specific case child-rearing periods can be aggregated in accordance with its legal provisions. If this is not the case the law of the Member State, which was applicable to a child-rearing person at the time a child-rearing period according to Art. 11 et seq. commenced, should be applied, which necessitates a child-rearing period completed in another Member State being treated as equal to the same type of period completed in the person’s home country (according to Art. 5 cf. CJEU, Case C-522/10 (Reichel-Albert), EU:C:2012:114, opinion of the advocate-general of 1 March 2012). An additional condition is that no overriding conflict-of-Member State exists for the child-rearing person due to a person's employment or self-employment (according to Art. 11 (3)(a)(b)) (para. 3).

Article 53 Rules to prevent overlapping (1) Any overlapping of invalidity, old-age and survivors' benefits calculated or provided on the basis of periods of insurance and/or residence completed by the same person shall be considered to be overlapping of benefits of the same kind. (2) Overlapping of benefits which cannot be considered to be of the same kind within the meaning of paragraph 1 shall be considered to be overlapping of benefits of a different kind. (3) The following provisions shall be applicable for the purposes of rules to prevent overlapping laid down by the legislation of a Member State in the case of overlapping of a benefit in respect of invalidity, old age or survivors with a benefit of the same kind or a benefit of a different kind or with other income: (a) the competent institution shall take into account the benefits or incomes acquired in another Member State only where the legislation it applies provides for benefits or income acquired abroad to be taken into account; (b) the competent institution shall take into account the amount of benefits to be paid by another Member State before deduction of tax, social security contributions and other individual levies or deductions, unless the legislation it applies provides for the application of rules to prevent overlapping after such deductions, under the conditions and the procedures laid down in the Implementing Regulation; (c) the competent institution shall not take into account the amount of benefits acquired under the legislation of another Member State on the basis of voluntary insurance or continued optional insurance; (d) if a single Member State applies rules to prevent overlapping because the person concerned receives benefits of the same or of a different kind under the legislation of other Member States or income acquired in other Member States, the benefit due may be reduced solely by the amount of such benefits or such income. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Legal definitions (para. 1 and 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. General rules on coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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1 2 2 5

Article 53

I. Spirit and Purpose

Editorially revised, the provision replaces Art. 46 a Reg. No. 1408/71, which 1 in turn was re-introduced in connection with the change to the regulation on the maximum amount in Art. 46 (3) Reg. No. 1408/71 by virtue of the amendment in Reg. No. 1248/92 of 30 April 1992 (OJ (EC) L 136 of 19 May 1992). Combined with the following regulations in Art. 54 and 55, it forms a unit based on CJEU case law, under which regulating the scope of the application of anti-overlapping rules to external old-age pensions is also the task of the regulators of the Member States. Art. 53-55 contain rules to counteract the unjustifiable reduction of the pension claims of beneficiaries, in cases where the rules on reduction, suspension or withdrawal also overlap. The determining factor here is differentiating between pensions of the same and those of a different type, as developed by the CJEU. II. Commentary 1. Legal definitions (para. 1 and 2)

Para. 1 contains the legal definition of the overlapping of the same types of 2 pensions, the essential criteria for which the CJEU has already described (e.g. in Case C-108/89 (Pian), EU:C:1990:167 and Case 109/89 (Bianchin)). In accordance with para. 1, the overlapping of the same person’s invalidity, old-age or survivor’s pensions for insurance and/or a pension biography is regarded as overlapping of the same types of pensions. The legal definition in para. 1 is clearer than the original case law criteria. No 3 longer primarily based on the function of the pensions, instead, as worded here, it is only based on a person’s aggregated insurance and residence periods. Therefore, a German old-age pension and a Belgian old-age pension, based on the aggregated insurance periods of a former spouse, which the beneficiary receives as the divorcee of said spouse, are not pensions of the same type as understood by Art. 12 (2) and Art. 46 (1) Reg. No. 1408/71 (CJEU, Case C-98/94 (Schmidt), EU:C:1995:273). For the overlapping of a French old-age pension and a Belgian survivors’ pension cf. CJEU, Case C-366/96 (Cordelle), EU:C:1998:57 and Art. 12 Reg. No. 5). However, the CJEU judiciary also defines social security pensions as pensions of the same type if their subject and purpose, also the basis on which they are calculated and the criteria for granting them are identical (CJEU, Case C-366/96 (Cordelle), EU:C:1998:57; Case C-107/00 (Insalaca), EU:C: 2002:147). According to the corresponding negative delimitations in para. 2, any other 4 overlapping of pensions is regarded as overlapping of different types of pensions.

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2. General rules on coordination 5

6

7

8

9

Para. 3 concerns uniform rules on the coordination of the overlapping of pensions of the same or a different type, again mainly in accordance with the requirements of CJEU case law. External Member State pensions or the income obtained from these in other Member States can only be considered as justifying a reduction in payment within the scope of national anti-overlapping rules, if these national provisions provide for this, i.e. and attach corresponding international application to them (para. 3(a); see previous law e.g. Case C-279/82 (Jerzak), EU:C:1993:228). Para. 3(c) prohibits the consideration of pensions from external Member States if these are granted on the basis of (additional) voluntary insurance (cf. CJEU, Case 176/78 (Schaap), EU:C:1979:112). This rule is based on regarding pensions in terms of employees’ contributions. Concerning the application of the anti-overlapping rules of only one Member State (for the repeated application of reduction rules cf. Art. 54 and Art. 55), para. 3(d) determines the upper limit as the amount of income obtained from a pension in an external Member State or the amount obtained in another Member State. The national suspension and/or withdrawal provisions are thereby reduced to reduction provisions in relation to pensions in external States and/or to income from other Member States. These rules only produce unjustifiable results if they are narrowly interpreted as anti-overlapping rules. In the same vein Art. 45 TFEU (= Art. 39 EC) prohibits the competent authorities of a Member State applying national legal provisions, according to which the old-age pension of a married employee can be reduced after consideration of the old-age pension from the external Member State of the spouse of the employee, if granting the latter pension does not produce an increase in the total income of the household (CJEU, Case C-262/97 (Engelbrecht), EU:C:2000:492, in the case of the Dutch old-age pension of a wife, which had already resulted in the reduction of the husband’s pension and furthermore was supposed to be the reason for converting the husband’s old-age pension approved under Belgian law from a family pension into a (lower) single person’s pension).

Article 54 Overlapping of benefits of the same kind (1) Where benefits of the same kind due under the legislation of two or more Member States overlap, the rules to prevent overlapping laid down by the legislation of a Member State shall not be applicable to a pro-rata benefit. (2) The rules to prevent overlapping shall apply to an independent benefit only if the benefit concerned is: (a) a benefit the amount of which does not depend on the duration of periods of insurance or residence,

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Article 55 or (b) a benefit the amount of which is determined on the basis of a credited period deemed to have been completed between the date on which the risk materialised and a later date, overlapping with: (i) a benefit of the same type, except where an agreement has been concluded between two or more Member States to avoid the same credited period being taken into account more than once, or (ii) a benefit referred to in subparagraph (a). The benefits and agreements referred to in subparagraphs (a) and (b) are listed in Annex IX.

Editorially revised, the provision replaces Art. 46 b Reg. No. 1408/71, which 1 in turn has been inserted by means of the amendment to Directive (EC) 1248/92 of 30 April 1992 (OJ (EC) L 1361 of 19 May 1992). Concerning the overlapping of pensions of the same type, para. 1 excludes 2 any application of national anti-overlapping provisions to pro-rata pensions calculated under Community law (in accordance with Art. 52 (1)(b)). This rule is also based on CJEU case law (e.g. Case C-108/89 (Pian), EU:C:1990:167; Case C-109/89 (Bianchin)). It is justified in that only the total sum of pro-rata pensions from the Member States concerned results in the complete security of the beneficiary, it making no difference whether this involves more than one pro-rata invalidity pension (due to different rules on age limits in the Member States) or the overlapping of pro-rata invalidity pensions and pro-rata old-age pensions from another Member State. Concerning the calculation of independent pensions according to Art. 52 (1) 3 (a), para. 2 renders the application of anti-overlapping provisions to pensions of the same type subject to special criteria. Accordingly, pensions that can be reduced due to the drawing of pensions of the same type (para. 2(b)(i)) or a pension of which the amount is calculated on the basis of length of time (para. 2 lit. b,ii)), are listed in Annex IX. Three of the agreements listed in Part III of Annex IX, concerning the prevention of the double or triple aggregation of one and the same notional period in Art. 54 (2)(b)(i), are the agreement on social security between the Republic of Finland and the Federal Republic of Germany of 28 April 1997, the agreement on social security between the Republic of Finland and the Grand Duchy of Luxembourg of 10 November 2000 and the Nordic Convention on social security of 18 August 2003.

Article 55 Overlapping of benefits of a different kind (1) If the receipt of benefits of a different kind or other income requires the application of the rules to prevent overlapping provided for by the legislation of the Member States concerned regarding:

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two or more independent benefits, the competent institutions shall divide the amounts of the benefit or benefits or other income, as they have been taken into account, by the number of benefits subject to the said rules; however, the application of this subparagraph cannot deprive the person concerned of his/her status as a pensioner for the purposes of the other chapters of this Title under the conditions and the procedures laid down in the Implementing Regulation; (b) one or more pro rata benefits, the competent institutions shall take into account the benefit or benefits or other income and all the elements stipulated for applying the rules to prevent overlapping as a function of the ratio between the periods of insurance and/or residence established for the calculation referred to in Article 52(1)(b) (ii); (c) one or more independent benefits and one or more pro-rata benefits, the competent institutions shall apply mutatis mutandis subparagraph (a) as regards independent benefits and subparagraph (b) as regards pro rata benefits.

(2) The competent institution shall not apply the division stipulated in respect of independent benefits, if the legislation it applies provides for account to be taken of benefits of a different kind and/or other income and all other elements for calculating part of their amount determined as a function of the ratio between periods of insurance and/or residence referred to in Article 52(1)(b)(ii). (3) Paragraphs 1 and 2 shall apply mutatis mutandis where the legislation of one or more Member States provides that a right to a benefit cannot be acquired in the case where the person concerned is in receipt of a benefit of a different kind, payable under the legislation of another Member State, or of other income. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. More than one stand-alone pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Aggregation of pro-rata pensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Aggregation of both stand-alone and pro-rata pensions . . . . . . . . . . . . . 4. Supplementary rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 3 3 5 6 7

I. Spirit and Purpose

With amended content, the provision in para. 1 replaces Art. 46 c Reg. No. 1408/71, which in turn has been inserted by means of Reg. No. 1248/92 of 30 April 1992 (OJ (EC) L 136 of 19 May 1992). The rule must be applied to pension payments from the application of the Regulation (Art. 87 para. 9) onwards. 2 The main subject of this rule is a problem concerning the coordination of the international application of anti-overlapping provisions, namely, the repeated or reciprocal reduction or withdrawal of pensions. The provision affects the overlapping of pensions of a different type (see Art. 53 (2) and, in accordance with Art. 52 (1)(2), differentiates pensions in terms of whether the existing pension claim is based on a stand-alone, i.e. a purely national pension or a pro-rata pension, i.e. one based on Community law. A general judgement as to which of the two coordinating methods (division according to the number of pensions to be reduced or pro-rata division) is the more favourable is not possible. 1

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II. Commentary 1. More than one stand-alone pension

If anti-overlapping rules are to be applied to more than one independent pen- 3 sion of a different type, para. 1(a) provides an amendment to the effect that the amounts to be considered must be divided by the number of pensions affected by the reduction. Accordingly, it is now the amounts of the pensions to be aggregated (no longer the reduced sums), which are divided, after which the remaining sum is then calculated. The amount of the sum to be considered is determined in accordance with Art. 53 (3)(c). If e.g. an accident insurance pension causes the reduction of a pension based on national pension insurance and of a pension based on the pension insurance of an external Member State, the aggregated pension must be halved. This means the Regulation desists from establishing a hierarchy of Member State pensions. Instead, it seeks to average the reduction by means of arithmetic. Status protection is attached to this Regulation. Even if the application of the 4 reduction rule leads to the complete reduction of a pension, which results in the non-payment of any pension, the person concerned can continue to be regarded as a pensioner, which is particularly important as regards the rules on sickness and care benefits for pensioners (Section 2, Chapter 1 Title III Reg.). 2. Aggregation of pro-rata pensions

In the case of pro-rata pensions (based on Community law) according to 5 Art. 55 (1)(b), in the event of repeated reduction, other pensions are reduced according to the pro-rata basis calculated there (Art. 52 (1)(b)(ii). 3. Aggregation of both stand-alone and pro-rata pensions

If independent and pro-rata pensions overlap when anti-overlapping provi- 6 sions are applied, the respective rules on division in para. 1(a)(b) should be applied to the respective type of pensions (para. 1(c)). 4. Supplementary rules

According to para. 2 independent pensions are not divided if the applicable 7 law of the Member State provides for pro-rata reduction. Section 97 (2) sentence 4 SGB (German Social Code Book) VI provides for this type of reduction; however, if this refers to Art. 46 (2) Reg. No. 1408/71, pensions of this type are not affected as a result. Similarly, the rule in para. 3, according to which para. 2 and 3 should also be 8 applied in the event that, according to national anti-overlapping laws, claims for pensions of a different type from external Member States can prevent a claim arising, can substantially interfere with national hierarchies of pensions in certain circumstances. This is an unfortunate consequence of both the wording and

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content of the rule, especially its effect on the drawing of other income preventing claims.

Article 56 Additional provisions for the calculation of benefits (1) For the calculation of the theoretical and pro rata amounts referred to in Article 52(1)(b), the following rules shall apply: (a) where the total length of the periods of insurance and/or residence completed before the risk materialised under the legislations of all the Member States concerned is longer than the maximum period required by the legislation of one of these Member States for receipt of full benefit, the competent institution of that Member State shall take into account this maximum period instead of the total length of the periods completed; this method of calculation shall not result in the imposition on that institution of the cost of a benefit greater than the full benefit provided for by the legislation it applies. This provision shall not apply to benefits the amount of which does not depend on the length of insurance; (b) the procedure for taking into account overlapping periods is laid down in the Implementing Regulation; (c) if the legislation of a Member State provides that the benefits are to be calculated on the basis of incomes, contributions, bases of contributions, increases, earnings, other amounts or a combination of more than one of them (average, proportional, fixed or credited), the competent institution shall: (i) determine the basis for calculation of the benefits in accordance only with periods of insurance completed under the legislation it applies; (ii) use, in order to determine the amount to be calculated in accordance with the periods of insurance and/or residence completed under the legislation of the other Member States, the same elements determined or recorded for the periods of insurance completed under the legislation it applies; where necessary in accordance with the procedures laid down in Annex XI for the Member State concerned; (d) In the event that point(c) is not applicable because the legislation of a Member State provides for the benefit to be calculated on the basis of elements other than periods of insurance or residence which are not linked to time, the competent institution shall take into account, in respect of each period of insurance or residence completed under the legislation of any other Member State, the amount of the capital accrued, the capital which is considered as having been accrued or any other element for the calculation under the legislation it administers divided by the corresponding units of periods in the pension scheme concerned. (2) The provisions of the legislation of a Member State concerning the revalorisation of the elements taken into account for the calculation of benefits shall apply, as appropriate, to the elements to be taken into account by the competent institution of that Member State, in accordance with paragraph 1, in respect of the periods of insurance or residence completed under the legislation of other Member states.

I. Spirit and Purpose 1

With its text streamlined, Art. 56 replaces Art. 47 Reg. No. 1408/71 and contains special rules assigning different types of pension calculations and pension

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Article 57

formulae for calculating the theoretical and proratarised amounts in accordance with Art. 52 (1). II. Commentary

In detail, rules on the following types of pension calculations and calculating 2 factors are drawn up: – Para. 1(a)(b) apply to the stipulated maximum length of insurance and residence periods. – Para. 1(c) applies to calculating pensions according to an average payment, average income etc. or, in accordance with the German law on pension insurance, for calculating pensions in relation to the difference that exists between the employee’s gross income and the average income of all those insured, except apprentices. The cases in para. 1 do not refer to invalidity schemes, such as e.g. the Dutch 3 Wet op de arbeidsongeschiktheidsverzekering (WAO (old-age pensions)), in which the amount of pension is calculated independently of the length of insurance periods, and forms the basis on which these are measured, but to the remuneration of the person insured or a certain average remuneration, which was last achieved before the risk materialised (CJEU, Case 181/83 (Weber), EU:C: 1984:370, SozR (social law) 6050 Art. 47 no. 3).

Article 57 Periods of insurance or residence of less than one year (1) Notwithstanding Article 52(1)(b), the institution of a Member State shall not be required to provide benefits in respect of periods completed under the legislation it applies which are taken into account when the risk materialises, if: – the duration of the said periods is less than one year, and – taking only these periods into account no right to benefit is acquired under that legislation. For the purposes of this Article, "periods" shall mean all periods of insurance, employment, self-employment or residence which either qualify for, or directly increase, the benefit concerned. (2) The competent institution of each of the Member States concerned shall take into account the periods referred to in paragraph 1, for the purposes of Article 52(1)(b)(i). (3) If the effect of applying paragraph 1 would be to relieve all the institutions of the Member States concerned of their obligations, benefits shall be provided exclusively under the legislation of the last of those Member States whose conditions are satisfied, as if all the periods of insurance and residence completed and taken into account in accordance with Articles 6 and 51(1) and (2) had been completed under the legislation of that Member State. (4) This Article shall not apply to schemes listed in Part 2 of Annex VIII.

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Part 2: Regulation (EC) No 883/2004 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Payment exemption of the originally competent institution (para. 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. The duty of other competent institutions to consider and pay for periods (para. 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Overlapping of mini periods alone (para. 3) . . . . . . . . . . . . . . . . . . . . . . . . . . 5. No mini period rule for schemes in ANNEX VIII Part 2 (para. 4)

1 3 3 5 7 11 12

I. Spirit and Purpose

The provision contains what is known as a minimum period rule, which is also customary in many bilateral agreements between the Member States and according to which, in order to simplify administration and prevent mini pensions, negligible (insurance) periods are not paid for under the pension law of the Member State, according to whose legal provisions they were aggregated, but by the competent institutions of the remaining Member States. The only exceptions are mini periods, which justify an independent pension claim under Member State law. Otherwise, mini periods are adopted by the competent institutions of other Member States under their laws and treated as their own periods when the pensions are calculated. However, the duty to adopt and pay for the periods only applies within the scope of the geographical application of the Regulation and Art. 7, i.e. not to the residence of those entitled to such in non-member countries (cf. CJEU, Case C-331/06 (Chuck), EU:C:2008:188 ). 2 With slight modifications, the provision replaces Art. 48 Reg. No. 1408/71. Art. 27 (1) Reg. No. 3, Art. 28 (2) Reg. No. 4 already contained a similar rule, albeit restricted to periods totalling less than six months. Art. 48 Reg. No. 1408/71 raised the negligibility limit to twelve months. For practical reasons, national competent institutions wished to dispense with this mini period rule. However, it was adopted in the new Regulation, which states clearly which periods should be included when checking mini periods of a year. 1

II. Commentary 1. Material scope 3

The rules in Art. 57 only apply to Chapter 5, i.e. to old-age pensions and death grants, also to invalidity pensions based on reference to Art. 46 (1), and not to orphan’s pensions to be assessed according to the rules in Chapter 8, since in Chapter 8, reference is made to Art. 57 (see former CJEU law, Case C-269/87 (Ventura), EU:C:1988:545). According to para. 4, the schemes listed in Part 2 of Annex VIII are also excluded. Moreover, where general or basic pension schemes are concerned, payment for periods of less than twelve months remains the duty of the competent institution of the respective (competent) Member State. The effect of the other amendment introduced regarding the duty to pay

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for mini periods is that the originally competent institution is made exempt from its duty to pay (insurance burden) (para. 1) and consideration of these pensions is transferred to the other competent institutions under Community law on pension calculation (para. 2). Newly introduced in para. 1 is the clear, special definition of the periods, 4 which are to be included “for the purposes of this Article”, that is, only those which are “directly” relevant “to the amount of pension”, as understood in this rule. 2. Payment exemption of the originally competent institution (para. 1)

Exemption from the duty to pay is made on the following two conditions, 5 which are now more clearly highlighted by the editor: Insurance or residence periods of less than a year (twelve calendar months): It is the legal provisions of the respective Member State, which determine the length of the periods aggregated in that Member State. A pension claim can only be claimed for the relevant periods when checking whether less than twelve months has been aggregated. Accordingly, residence periods in another Member State can only be considered if, under the legal provisions of this member State, pension claims depend on the aggregation of residence periods (CJEU, Case C-76/82 (Malfitano), EU:C:1982:424). 6 Lack of independent pension claims for these periods: Exemption from the duty to pay also applies (in accordance with what is known as the Petroni principle) to periods of less than twelve calendar months if these, according to the legal provisions of the respective Member State, do not justify an independent pension claim. This is determined above all by the fulfilment of the specified minimum waiting time. In contrast, additional conditions for claiming, such as current insurance for this Member State at the time the risk materialised, are not required (CJEU, Case C-76/82 (Malfitano), EU:C: 1982:424). 3. The duty of other competent institutions to consider and pay for periods (para. 2)

Corresponding to the exemption of the institution actually competent for pay- 7 ment according to para. 1, para. 2 determines that the periods concerned must be considered by the competent institution of every other Member State when determining the theoretical amount in accordance with Art. 52 (1)(b). The duty to consider these applies regardless of whether, under the legal provisions of the Member State making the consideration, an independent pension claim exists or not (cf. in this context CJEU, Case C-55/81 (Vermaut), EU:C:1982:68). Nor is a pension claim required to exist under the legal provisions, according to which the insurance periods have been aggregated. Consideration of these negligible periods from external Member States when 8 calculating the theoretical amount in accordance with Art. 52 (1)(b) and forming Rolf Schuler

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the pro-rata-temporis factor based on these periods results in these negligible periods also being paid for by the competent institution of this Member State, where pension-relevant periods of longer than eleven calendar months are concerned. Regarding periods over eleven calendar months in more than one additional Member State, in the final analysis the negligible periods are considered on a pro-rata basis according to Art. 48 (1) when calculating pensions under the (Community) laws of these Member States, and, if the partial pension also to be calculated alternatively according to purely national law is higher, to be paid for on a pro-rata basis. 9 The institution competent for payment according to para. 2 or para. 3 cannot require the person insured to pay contributions or to transfer contributions for periods as understood by Art. 57 (CJEU, Case C-55/81 (Vermaut), EU:C: 1982:68). 10 The insurance periods from external Member States to be considered according to para. 2 and 3 do not lose their status as external periods, and, unlike rules on insurance burdens under convention provisions, are not incorporated into national law. 4. Overlapping of mini periods alone (para. 3) 11

To prevent the non-payment of pensions due to an overlapping of negligible periods alone, from payment of which the originally competent institutions are made exempt in accordance with para. 1, para. 3 contains a rule according to which the competent institution of the Member State, under whose legal provisions insurance and residence periods were last aggregated before the risk materialised and whose payment conditions have been fulfilled has a duty to pay after consideration of all the remaining insurance and residence periods from all other Member States. 5. No mini period rule for schemes in ANNEX VIII Part 2 (para. 4)

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Para. 4 was inserted under Directive (EC) no. 988/2009 and concerns capitalcovered pension schemes in which periods are immaterial when calculating pensions and are listed in ANNEX VIII Part 2. These pensions are not calculated on a pro-rata or pro-rata-temporis basis in accordance with Art. 52 (5) and always paid for as independent amounts. This justifies the omission of these pensions from the special rule in Art. 57, and, in consequence, the other competent institutions not being duty bound to consider and pay for these schemes (para. 2) in practice.

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Article 58 Award of a supplement (1) A recipient of benefits to whom this chapter applies may not, in the Member State of residence and under whose legislation a benefit is payable to him/her, be provided with a benefit which is less than the minimum benefit fixed by that legislation for a period of insurance or residence equal to all the periods taken into account for the payment in accordance with this chapter. (2) The competent institution of that Member State shall pay him/her throughout the period of his/her residence in its territory a supplement equal to the difference between the total of the benefits due under this Chapter and the amount of the minimum benefit.

Editorially revised, the provision replaces Art. 50 Reg. No. 1408/71 and en- 1 sures that the person entitled to a pension in his/her home country will at least receive mini pensions as high as those stipulated under the pension law there, if the conditions under which these mini pensions are granted have been fulfilled by means of the aggregation of all the insurance periods. If the total sum of prorata pensions, to which the person is entitled, is less than the mini pension, the competent institution of the Member state of residence must pay a pension supplement equal to the difference. This supplement must only be paid for periods, during which the beneficiary resided in the sovereign territory of this state. This rule did not remain unchallenged regarding the restrictions imposed on what are known as mixed pensions, i.e. regarding those relating to needs and therefore to benefits similar to social benefits. It is based on the integration principle acknowledged in this context and included in the aggregation of pro-rata pensions from external Member States. A condition for applying Art. 58 is that the pension law of the country of resi- 2 dence provides for a mini pension (CJEU, Case C-64/77 (Torri), EU:C: 1977:197). This type of pension only exists if the pension law of the country of residence contains a specific guarantee intended to ensure that the recipients of social security pensions receive minimum incomes (in the form of supplements), which are higher than the amount of the pensions, which they can demand due to their insurance periods and contributions alone (CJEU, Case 22/81 (Browning), EU:C:1981:316). This is determined above all by the respective pension law of the Member State, the features and aims of the pension in question. These types of mini pensions and/or supplements are known in e.g. Belgian, French, Greek, British, Italian, Portuguese and Spanish pension laws, likewise that of Luxembourg, but not in German pension insurance law. The competent institution of the country of residence must, if applicable, pay 3 the amount of the difference between the total sum of the Member State partial pensions and the mini pension. The duty to pay this amount of the difference requires the person entitled to reside in that country. This rule is more specific and therefore takes precedence over the general rule on the waiving of residence rules in Art. 7.

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Article 59 Recalculation and revaluation of benefits (1) If the method for determining benefits or the rules for calculating benefits are altered under the legislation of a Member State, or if the personal situation of the person concerned undergoes a relevant change which, under that legislation, would lead to an adjustment of the amount of the benefit, a recalculation shall be carried out in accordance with Article 52. (2) On the other hand, if, by reason of an increase in the cost of living or changes in the level of income or other grounds for adjustment, the benefits of the Member State concerned are altered by a percentage or fixed amount, such percentage or fixed amount shall be applied directly to the benefits determined in accordance with Article 52, without the need for a recalculation.

With slight modifications, the provision replaces Art. 51 Reg. No. 1408/71. Para. 1 names the reasons for recalculating pensions in accordance with Art. 52, but does not refer to the Member State law to be applied. 2 Pensions must be recalculated in accordance with Art. 52 not only under amendments made for reasons of adjustment, but also for all the reasons which affect pension amounts (CJEU, Case C-7/81 (Sinatra), EU:C:1982:24). Para. 1 explicitly names amendments to the determination procedure or the method of calculation. According to previous CJEU case law this includes not only the conversion and reconversion of survivors’ pensions and benefits due to reduced capacity for work, but also amendments to the underlying factors used to calculate these, including amendments to the amount of other pensions, which – in the case of accident insurance benefits – due to anti-overlapping rules, have affected the amounts of these benefits determined according to Art. 52 (CJEU, Case C-104/83 (Cinciuolo), EU:C:1984:100). 3 According to CJEU case law the benefits did not require recalculation and therefore re-comparison with purely national benefits and those calculated under Community law, if amending a benefit was based on events which had no connection with the personal situation of the person entitled to such and resulted from the general development of the economic and social situation. This was intended to prevent administrative work which every amendment to the pension granted to the person entitled to such would have entailed (CJEU, Case C-193/92 (Bogana), EU:C:1993:75 with reference to the judgement in Case C-93/90 (Cassamali), EU:C:1991:130). This case law was included in the wording of para. 1 from then onwards. 4 With this in mind, the CJEU (Case C-85/89 (Ravida), EU:C:1990:128) had already decided that, in the case of a widow whose Belgian survivors’ pension was reduced according to a Belgian overlapping rule on maximum amounts, due to her Italian old-age and survivors’ pensions, Art. 51 (1) Reg. No. 1408/71 opposes the recalculation of the reduced Belgian survivors’ pension due to the adjustments made to the Italian old-age pension, if these adjustments are (merely) the consequence of the general development of the economic and social situa1

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tion. Regarding these types of amendments to benefits, the fate of the reduced benefits and the benefits from external states remains separate. These are only connected once again in the event that recalculation is otherwise required. However, Art. 59 (2) is not applicable to pensions such as those guaranteeing 5 minimum income in old age. Otherwise this would lead to increases in the incomes based on allowances for external pensions not being considered and the amounts, which the person entitled should receive, would prove to be higher (in time considerably higher in certain circumstances) than the statutory guaranteed minimum income (CJEU, Case C-65/92 (Levatino), EU:C:1993:149 regarding the aggregation of an adjusted Italian old-age pension to a Belgian minimum old-age pension). In accordance with Art. 59 (1) pensions should only be recalculated according 6 to Art. 52 if the determination procedure and the method of calculation are amended, or (recently included) if the situation of the person concerned has changed considerably, i.e. they are only admissible in such situations. The wording, scheme and purpose of Art. 59 only affect pensions included in Chapter 5 of Title III, i.e. old-age and survivors’ pensions and invalidity benefits.

Article 60 Special provisions for civil servants (1) Articles 6, 50, 51(3) and 52 to 59 shall apply mutatis mutandis to persons covered by a special scheme for civil servants. (2) However, if the legislation of a competent Member State makes the acquisition, liquidation, retention or recovery of the right to benefits under a special scheme for civil servants subject to the condition that all periods of insurance be completed under one or more special schemes for civil servants in that Member State, or be regarded by the legislation of that Member State as equivalent to such periods, the competent institution of that State shall take into account only the periods which can be recognised under the legislation it applies. If, account having been taken of the periods thus completed, the person concerned does not satisfy the conditions for the receipt of these benefits, these periods shall be taken into account for the award of benefits under the general scheme or, failing that, the scheme applicable to manual or clerical workers, as the case may be. (3) Where, under the legislation of a Member State, benefits under a special scheme for civil servants are calculated on the basis of the last salary or salaries received during a reference period, the competent institution of that State shall take into account, for the purposes of the calculation, only those salaries, duly revalued, which were received during the period or periods for which the person concerned was subject to that legislation. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Inclusion of civil servants in coordination under pension law . . . . . . 2. Consideration of periods from external Member States, which were aggregated in special schemes for civil servants . . . . . . . . . . . . . . . 3. Income relevant to pension calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose 1

Editorially revised, the provision replaces Art. 51 Reg. No. 1408/71. That Article was introduced following year-long discussions about the coordination of special schemes for civil servants under Community law (cf. the Commission’s first draft of December 1991 (OJ (EC) 46, p. 1) according to a clear reference and order from the CJEU in Case C-443/93, (Vougioukas), EU:C:1995:394 = EuroAS 1996, 14 et seq. with note Schuler) by means of an amending Directive (EC) no. 1606/98 of the Council of 29 June 1998 for the purposes of including special schemes for civil servants and people treated as such (cf. OJ EC L 209). II. Commentary 1. Inclusion of civil servants in coordination under pension law

Para. 1 extends all the rules on coordination in Chapter 5 to people who are registered under special schemes for civil servants (regarding the definition of civil servants cf. Art. 1(d); regarding the definition of special schemes cf. Art. 1(e)). This general inclusion of civil servants in the coordination of old-age pensions, death grants and invalidity benefits under Community law corresponds to the proposals in the Commission’s draft of 1991. However, it is significantly qualified and restricted by the rules in para. 2. 3 Moreover, it continues to refrain from laying down a special rule on the equal treatment of activities in the public sector in another Member State (cf. also in this context CJEU, Case C-28/92 (Leguaye-Neelsen), EU:C:1993:942). Civil servants who enter the employment of the public sector employer of another Member State may therefore lose their civil servant status entitling them to provision under the provisions of national law. 2

2. Consideration of periods from external Member States, which were aggregated in special schemes for civil servants

Para. 2 contains rules on the consideration of periods, which were aggregated in special schemes for civil servants in external Member States, for both special schemes and general pension schemes. 5 According to para. 2 sentence 1 the consideration of periods in external Member States is calculated in special schemes for civil servants according to the respective national legal provisions of these special schemes. The basic principle behind the inclusion of civil servants in the coordination of old-age pensions, death grants and invalidity benefits under Community law in para. 1 is again abandoned in special schemes for civil servants, and the competence for regulating this transferred to the Member States. Periods from external Member States are only to be considered, if applicable, to the extent that this is provided for in the national legal provisions to be applied. 4

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According to para. 2 sentence 2 the institutions competent for the general 6 pensions which ensure security in old age and in the event of invalidity are duty bound to consider aggregated periods in special schemes for civil servants as justifying claims if the requirements for pensions from the (respective national) special schemes have not been fulfilled. Accordingly, the institutions competent for pension insurance also have a standard duty to consider periods from external Member States, which were aggregated in special schemes for civil servants and those treated equally in accordance with the general rules on equality. 3. Income relevant to pension calculation

However, according to para. 2 sentence 2 the national institutions competent 7 for pension insurance should also consider periods from external Member States, which were aggregated in special schemes for civil servants, if the special schemes do not include pension claims. Para. 3 does not stipulate the consideration of foreign income regarding the 8 calculation of the amounts of pensions if this calculation is based on the income last achieved, (if applicable, in a period when pensions were drawn), but declares the income achieved during the last activity in a national special scheme as the relevant income, stipulating adjustment to this.

Chapter 6 Unemployment benefits Bibliography: Cornelissen, The New EU Coordination System for Workers who become Unemployed, 9 (2007), European Journal of Social Security, p. 187 et seq.; Eichhorst/Kaufmann/ Konle-Seidl (ed.), Bringing the Jobless into Work?, 2008; Esser/Ferrarini/Nelson/Palme/ Sjöberg, Unemployment Benefits in EU Member States, European Commission. Employment, Social Affairs & Inclusion, 2013; Fuchs, EU-Koordinationsrecht der Leistungen bei Arbeitslosigkeit, in: Gagel, SGB II / SGB III: Grundsicherung und Arbeitsförderung, 2012; Fuchs, The Implementation of Coordination Regulations in Active Labour Market Policy Provisions at National Level, in: European Commission (ed.), 50 Years of Social Security Coordination, 2010, pp. 91-110; Jorens/Van Overmeiren, Allgemeine Prinzipien der Koordinierung in Verordnung 883/2004, in: Eichenhofer (ed.), 50 Jahre nach ihrem Beginn – Neue Regeln für die Koordinierung sozialer Sicherheit, 2009, p. 105 et seq.; Karl, Neuerungen in der Koordinierung des europäischen Arbeitslosenversicherungsrechts, in: Marhold (ed.), Das neue Sozialrecht der EU, 2005, p. 39 et seq.; Pennings, Coordination of Unemployment Benefits Under Regulation 883/2004, in: 11 (2009), European Journal of Social Security, pp. 177-203; Vießmann, Zuständigkeiten der Mitgliedstaaten gemäß Verordnung (EG) Nr. 883/2004 im Fall

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Overview I. National employment promotion law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Employment promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. The European legal framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Primary law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. The coordination law of unemployment benefits . . . . . . . . . . . . . . . . . . . .

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I. National employment promotion law 1. Unemployment compensation 1

Normally most Member States favour an unemployment insurance scheme that is financed by contributions from wages and salaries. These are based on a model whereby a right to a cash benefit arises after a specific period of membership or payment of contributions (qualifying period), the amount of which is based on a specific percentage of the previously earned income and its duration mostly on the period of affiliation or payment of contributions. These unemployment insurances are for the most part compulsory insurance schemes. An exception here is Denmark, which has set up a voluntary unemployment insurance (cf. Kvist/Pedersen/Köhler, Making All Persons Work: Modern Danish Labour Market Policies, in: Eichhorst/Kaufmann/Konle-Seidl (eds.), Bringing the Jobless into Work?, 2008, p. 233 et seq.). All those unemployed persons who cannot fall back on unemployment benefits in the event of unemployment depend on forms of means-tested social welfare. 2. Employment promotion

2

Measures for promoting employment are continuously gaining in importance. They arose from the conviction that simply handing out cash benefits is not sufficient incentive for encouraging efforts to gain re-entry into working life. Instead of these “passive unemployment benefits” Member States have focussed increasingly on developing benefits of so-called active labour market policies (for the United Kingdom see Shackleton, Britain’s Labour Market under the Blair Governments, Journal of Labor Research, 2007, p. 445 et seq.; for a more general view see Fuchs, The Implementation of Coordination Regulations in Active Labour Market Policy Provisions at National Level, 2009). These activation measures are prevalent in varying degrees in the individual countries (cf. in this respect contributions of the individual EU Member States in: Eichhorst/Kaufmann/Konle-Seidl (eds.), Bringing the Jobless into Work?, 2008).

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II. The European legal framework 1. Primary law

The spectrum of national law concerning unemployment benefits described 3 above (para. 1) forms the background for the European coordination and demands very specific tasks of this. The notion that the removal of borders should also include unhindered access to the national labour markets was from the very outset an element of European integration (cf. here Fuchs/Marhold, Europäisches Arbeitsrecht, 4th ed., 2014, p. 2 et seq.). It was for this reason that the fundamental right of the freedom of movement of workers was embodied in the EEC Treaty (now Art. 45 et seq. TFEU). The first pillar of social law in this respect was the objective assigned in 4 Art. 48 TFEU to establish a European coordination law with the key principles of aggregation of insurance periods and the export of benefits. The second pillar was to back up cash unemployment benefits with cross-border support for employment services. The legal structure for this can be found in Art. 11 et seq. Reg. No. 492/2011 concerning the freedom of movement of workers within the Union (formerly Reg. (ECC) No. 1612/68), enacted due to the legal basis in Art. 46 (d) TFEU. Cross-border unemployment services developed upon this legal basis. 2. The coordination law of unemployment benefits

In the light of the primary law as described above (para. 3 et seq.) European 5 legislation established coordination of unemployment benefits in Art. 61-65(a). The provisions are seen as fulfilment of the primary law objective of coordination on the one hand while on the other they take account of the specific characteristics of national employment promotion laws and the peculiarities of labour migration in Europe. More specifically this means that: a) Art. 61 realised the principle of aggregation of the periods relevant for the acquisition and scope of the unemployment benefits. Whereby a distinction is made between periods of insurance, employment and self-employment. The latter is new. It reflects the intention of coordination law to take account of the latest developments in the Member States of introducing unemployment schemes for the self-employed. Para. 2 makes the aggregation of periods within the meaning of Art. 61 (1) conditional on the person concerned having the most recently completed periods in the competent State. b) The income relevant for calculating the unemployment benefits is determined in compliance with Art. 62. c) Art. 63 prepares the path for only limited application of the principle of benefit export embodied in Art. 7. d) Art. 64 codifies the legal conditions for the export of cash benefits abroad in the event an unemployed person goes to another EU Member State in order to seek work there. Maximilian Fuchs

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e) As was the case in former legislation, the new coordination Regulation has established a special provision for frontier workers in Art. 65, which includes rules for reimbursement in favour of the States of residence. f) Art. 65 a, inserted by Reg. No. 465/2012, is the response of the legislation to the problem of self-employed frontier workers, which was not identified until rather late. If the competent State of residence does not provide for an unemployment insurance scheme for the self-employed, a solution must be found via the Member State of last employment or last self-employment.

Article 61 Special rules on aggregation of periods of insurance, employment or self-employment (1) The competent institution of a Member State whose legislation makes the acquisition, retention, recovery or duration of the right to benefits conditional upon the completion of either periods of insurance, employment or self-employment shall, to the extent necessary, take into account periods of insurance, employment or self-employment completed under the legislation of any other Member State as though they were completed under the legislation it applies. However, when the applicable legislation makes the right to benefits conditional on the completion of periods of insurance, the periods of employment or self-employment completed under the legislation of another Member State shall not be taken into account unless such periods would have been considered to be periods of insurance had they been completed in accordance with the applicable legislation. (2) Except in the cases referred to in Article 65(5)(a), the application of paragraph 1 of this Article shall be conditional on the person concerned having the most recently completed, in accordance with the legislation under which the benefits are claimed: – periods of insurance, if that legislation requires periods of insurance, – periods of employment, if that legislation requires periods of employment, or – periods of self-employment, if that legislation requires periods of self-employment. Article 54 (1) Reg. No. 987/2009 Aggregation of periods and calculation of benefits (1) Article 12(1) of the implementing Regulation shall apply mutatis mutandis to Article 61 of the basic Regulation. Without prejudice to the underlying obligations of the institutions involved, the person concerned may submit to the competent institution a document issued by the institution of the Member State to whose legislation he was subject in respect of his last activity as an employed or self-employed person specifying the periods completed under that legislation.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Personal scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Material scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Aggregation of relevant periods (para. 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Aggregation by the competent institution (para. 2) . . . . . . . . . . . . . . . . . . 5. Administrative procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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The focus of the legal regulation of Art. 61 lies in the structure of the aggregation of periods relevant for the establishment and content of rights to unem374

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ployment benefits. The rule of the aggregation of relevant periods is among the elementary principles of coordination law and for this reason is bindingly embodied in primary law in Art. 48 (a) TFEU. This objective is now fulfilled by a specific provision of coordination law, namely Art. 6. Introduction of this provision rendered numerous other provisions of former legislation dealing with this principle superfluous (see here Art. 6 para. 1 above). The fact that a special rule for the aggregation of periods has been retained despite the general rule of Art. 6, as was the case in former legislation (Art. 67 Reg. No. 1408/71), is due to the peculiarities that characterise the unemployment schemes of the individual Member States. These peculiarities concern not only the treatment of periods relevant for acquisition of a right. For the first time Art. 61 includes the periods of activity as a self-employed person among the circle of periods. This takes account of the fact that in recent years more and more Member States have included the self-employed within the sphere of unemployment insurance. Where periods of insurance, employment or self-employment are relevant for 2 the competent institution according to the legislation it applies, similar periods completed in other Member States must be taken into account. This corresponds to the general principle already embodied in Art. 6, which has been affirmed by inclusion in Art. 61 (1)(1). By way of derogation from Art. 6, sentence 2 rules that if the legislation of the competent institution makes the right to benefits conditional on the completion of periods of insurance, the periods of employment or self-employment completed under the legislation of another Member State shall not be taken into account unless such periods would have been considered periods of insurance under the legislation of the competent institution. Art. 61 (2) primarily includes a restriction of the principle of the aggregation 3 of relevant periods in para. 1. According to para. 1 periods completed abroad can only be taken into account if the claimant has completed the periods indicated in para. 2 in the Member State of the competent institution “most recently”. In this respect para. 2 is, like the former Art. 67 (3) Reg. No.1408/71 important from the point of view of the conflict of law rules (see below para. 10 et seq. for more detail). The provision in Art. 5 cannot be applied with regard to relevant periods. 4 Recital No. 10 in the Preamble to Reg. No. 883/2004 has provided clarification in this respect. The principle that the treatment of facts and events occurring in another Member State as if they had occurred in the territory of the competent Member State should not interfere with the principle of aggregating periods of insurance, employment or self-employment. Periods should therefore be taken into account solely by applying the principle of aggregation of periods.

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II. Commentary 1. Personal scope 5

The right to unemployment benefits conveyed via Reg. No. 883/2004 requires that the claimant falls within the personal scope within the meaning of Art. 2. In contrast to former Art 2 Reg. No. 1408/71 the wording of the new provision of Art. 2 no longer requires fulfilment of an occupation-related characteristic for the persons mentioned in Art. 2 (worker, self-employed person). This does, of course, not mean that requirements on the acquisition of the right no longer play a role. In this respect the earlier case law of the CJEU with regard to the applicability of Reg. No. 1408/71 for family members comes to mind. In the fundamental decision in the Case Kermaschek the CJEU proclaimed that the members of the family of workers are entitled only to the benefits provided for by the national legislation for the members of the family of unemployed workers (CJEU, Case 40/76, EU:C:1976:157 para. 9). This led in the case in question to the spouse of a worker not being able to invoke her status of family member in order to claim to benefits arising from the 6th Chapter (now Art. 61 et seq.). In the Case C-308/93 (Cabanis-Issarte), EU:C:1996:169 the CJEU restricted this ruling to such cases where a member of the family of a worker invokes provisions of Reg. No. 1408/71 that are applicable only to workers, i.e. not the members of their family. However, the principles introduced in the judgement in the Case Kermaschek have been repeatedly affirmed by the CJEU (cf. most recently CJEU, Case C-189/00 (Ruhr), EU:C:2001:583). This case law continues to be valid under Reg. No. 883/2004 (cf. also Cornelissen, 50 Years of European Social Security Coordination, in: Eichenhofer (eds.), 50 Jahre nach ihrem Beginn, p. 17, 34). As Art. 61 et seq. does not differ in this point from the earlier Art. 67 et seq. Reg. No. 1408/71, it is to be assumed that this case law will remain valid. Insofar as third country nationals can be included within the scope of Reg. No. 883/2004 pursuant to Reg. No. 1231/2010, they can invoke Art. 61 et seq. 2. Material scope

6

Art. 61 encompasses all unemployment benefits that fall within the scope of Art. 3 (1)(h) (see Art. 3 para. 21 et seq. above for more details of these benefits). Art. 70 applies where unemployment benefits involving special non-contributory cash benefits are concerned (cf. here para. 15 above). 3. Aggregation of relevant periods (para. 1)

7

The principle of the aggregation of relevant periods embodied in para. 1(1) refers to periods of insurance, employment and self-employment. Insurance periods are defined in Art. 1 (t). In compliance with the case law of the CJEU it suffices for the requirement of completing insurance periods that the person concerned was insured in any social security scheme; compulsory insurance in a special scheme such as an unemployment insurance scheme is not required 376

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(CJEU, Case 388/87 (Warmerdam-Steggerda), EU:C:1989:196 para. 14 et seq.). This opinion of the CJEU must be rejected. It exceeds the limits set in the coordination provisions of the 6th Chapter. The intention of these provisions is to remove the disadvantages of migrant workers (migrant self-employed persons) that arise due to the principle of territoriality that exists in the Member States. But coordination law is not empowered to help prevent disadvantages that concern the conditions and content of national provisions pertaining to benefits. Thus the institution of the competent State cannot take into account an activity carried out in another Member State if this Member State does not provide for insurance cover for this activity against the risk of unemployment. Periods of employment or self-employment are defined in Art. 1 (u). In compliance with the principle laid down in para. 1(1) periods completed in parallel in other Member States of the EU must be applied without restriction. An important distinction applies pursuant to para. 1 (2) for periods of employ- 8 ment and self-employment. Namely when the applicable legislation makes the right to benefits conditional on the completion of periods of insurance, the periods of employment or self-employment completed under the legislation of another Member State shall not be taken into account unless such periods would have been considered to be periods of insurance had they been completed in accordance with the applicable legislation. Periods of insurance can also be such periods pursuant to legal norms that ap- 9 ply for unemployment benefits in accordance with the legislation of the competent institution (CJEU, Case C-88/95 (Losada), EU:C:1997:69). This case concerned Spanish nationals who had never been employed in Spain, but who claimed an allowance for unemployment persons over 52 years of age from the competent Spanish institution. As the plaintiffs had previously received another unemployment benefit under Spanish law, for which periods the competent Spanish institution had paid contributions to the sickness insurance and family benefits scheme on behalf of the plaintiffs, the question arose as to whether these periods constituted periods of insurance. The Court requested verification as to whether these periods were periods of insurance within the meaning of national legislation (cf. para. 35 and 37 of the judgement). The CJEU consistently affirmed these principles in the Case Alvite (CJEU, Case C-320/95, EU:C: 1999:90). The Case involved the same question. The Court stressed here that a right to the unemployment benefit cannot be derived from Art. 61 (2) nor from Art. 48 TFEU if the periods in question were deemed not to constitute periods of insurance pursuant to Spanish legislation. 4. Aggregation by the competent institution (para. 2)

Para. 2 is often misconstrued as the conflict of law rule that exclusively deter- 10 mines the competent institution for the granting of unemployment benefits. In this respect the CJEU proclaimed the relevant method of determination with remarkable clarity in the Case Adanez-Vega (CJEU, Case 372/02, EU:C:2004:705 Maximilian Fuchs

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para. 19 et seq.). Namely, that it is necessary to determine first of all which is the applicable legislation under the general rules governing connecting factors in Title II. Not until this has been determined is it necessary to decide whether the special rules governing connecting factors in the Regulation provide for the application of any other legislation. The starting point is therefore Art. 11. Starting from there it must first be asked whether the special rules of Art. 12-16 are pertinent. If not, Art. 11 (3)(a) to (d) must be taken into consideration. If these facts do not apply, the catch-all provision of Art. 11 (3) (e) comes into play. Even the wording of this provision indicates its subsidiary nature, i.e. other more special rules must first be considered. These also include the provision in Art. 61 (2). 11 In the light of the above the State competent for granting unemployment benefits is, pursuant to Art. 11 (3)(a), the State of employment or the State of self-employment. However, this should not be given a strict literal interpretation in the sense that (a) is excluded because there is no employment relationship due to the onset of unemployment. The correctness of this approach can in fact be seen in the intention of Art. 62 (2) which also assumes the competence of the State of employment or self-employment. In contrast the State of residence is, in compliance with Art. 11 (3)(e), the State competent for persons who have definitely ceased all occupational activity and those who have merely temporarily ceased their occupational activity (CJEU, Case C-372/02 (Adanez-Vega), EU:C: 2004:705 para. 24). 12 With the exception of frontier workers (Art. 65 (5)(a)) Art. 61 para. 2 requires the aggregation of periods if the person concerned has “most recently” completed periods, in accordance with the legislation under which the benefits are claimed. The objective of para. 2 is to encourage the search for work in the Member States in which the person concerned last paid contributions to the unemployment insurance scheme and to make that State bear the burden of providing the unemployment benefits (CJEU, Case C-62/91 (Gray), EU:C:1992:177 para. 12). The requirement of “most recently” pursuant to para. 2 is fulfilled if regardless of the lapse of time between completion of the last period of insurance and the application for the benefit, no other period of insurance was completed in another Member State in the interim (CJEU, Case C-372/02 (AdanezVega), EU:C:2004:705 para. 52). 5. Administrative procedure 13

If the competent institution is to take periods completed in another Member State into account, it must be in a position to reliably collect and legally assess the periods in question. With regard to the general provision of Art. 6, Art. 12 (1) Reg. No.987/2009 provides an effective method for aggregating periods. The competent institution shall contact the institutions of the Member States to whose legislation the person concerned has also been subject in order to determine all the periods completed under their legislation (Art 12 Reg. No. 987/2009, printed above with Art. 6). Art. 54 (1)(2) Reg. No. 987/2009 declares 378

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Art. 12 (1) Reg. No. 987/2009 as applicable for the aggregation pursuant to Art. 61. Pursuant to Art. 54 (1) (2) Reg. No. 987/2009 the need for information can also be satisfied by the unemployed person himself/herself submitting to the competent institution a document issued by the institution of the other Member State (Document U1). With regard to this document’s value as proof the CJEU ruled for the comparable certification in earlier case law (Art. 80 Reg. No. 574/72), that it does not contain irrefutable evidence (CJEU, Case C-102/91 (Knoch), EU:C:1992:303 para. 54; see also Case C-372/02 (Adanez/Vega), EU:C:2004:705 para. 48). At the same time the CJEU refers in the Case Adanez/ Vega (cf. para. 36) to its ruling concerning the probative value of the E-101 certification issued under former legislation and the procedures to be followed in this regard (cf. CJEU, Case C-202/97 (Fitzwilliam), EU:C:2000:75; Case C-2/05 (Herbosch/Kiere), EU:C:2006:69). It is to be assumed from this that the CJEU contemplated an analogous application of these principles.

Article 62 Calculation of benefits (1) The competent institution of a Member State whose legislation provides for the calculation of benefits on the basis of the amount of the previous salary or professional income shall take into account exclusively the salary or professional income received by the person concerned in respect of his/her last activity as an employed or self-employed person under the said legislation. (2) Paragraph 1 shall also apply where the legislation administered by the competent institution provides for a specific reference period for the determination of the salary which serves as a basis for the calculation of benefits and where, for all or part of that period, the person concerned was subject to the legislation of another Member State. (3) By way of derogation from paragraphs (1) and (2), as far as the unemployed persons covered by Article 65(5)(a) are concerned, the institution of the place of residence shall take into account the salary or professional income received by the person concerned in the Member State to whose legislation he/she was subject during his/her last activity as an employed or self-employed person, in accordance with the Implementing Regulation. Article 54 (2) (3) Reg. No. 987/2009 Aggregation of periods and calculation of benefits (2) For the purposes of applying Article 62(3) of the basic Regulation, the competent institution of the Member State to whose legislation the person concerned was subject in respect of his last activity as an employed or self-employed person shall, without delay, at the request of the institution of the place of residence, provide it with all the information necessary to calculate unemployment benefits which can be obtained in the Member State of residence, in particular the salary or professional income received. (3) For the purposes of applying Article 62 of the basic Regulation and notwithstanding Article 63 thereof, the competent institution of a Member State whose legislation provides that the calculation of benefits varies with the number of members of the family shall also take into account the members of the family of the person concerned residing in another Member State as if they resided in the competent Member State. This provision shall not apply where, in the Member State of residence of members of the family, another person is entitled to unemployment benefits calculated on the basis of the number of members of the family.

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Part 2: Regulation (EC) No 883/2004 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. The basic principle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Relevance of a reference period (para. 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Special rule for frontier workers (para. 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Taking into account of members of the family . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose 1

Art. 62 contains the method for calculating unemployment benefits. In most Member States unemployment benefits in cash are calculated on the basis of the amount of income received previous to the occurrence of unemployment. In the event that in the past the claimant received an income in a Member State other than the State of the competent institution, the question arises as to which income is to be taken as the basis for the calculation of the benefit. Para 1 decides here for the salary or professional income received in respect of his/her last activity as an employed or self-employed person under the competent State. The different provision of former legislation (Art. 68 (1)(2) Reg. No.1408/71) providing that if the person concerned had been in his last employment in the State of employment for less than four weeks, the benefits shall be calculated on the basis of the normal wage or salary corresponding to the place where the unemployed person is residing or staying, has not been adopted in the new legislation. The principle laid down in para. 1 shall, according to para. 2, also apply where the legislation administered by the competent institution provides for a specific reference period and where, for all or part of that period, the claimant was subject to the legislation of another Member State. By way of derogation from former legislation, a special rule has been created for the first time in para. 3 with regard to determining the income of benefits for frontier workers (Art. 65 (5)(a)). This provides that the competent institution of the State of residence shall take as a basis the salary or professional income received in the Member State of the last activity as an employed or self-employed person. II. Commentary 1. The basic principle

2

Para. 1 provides that the competent institution of the Member State shall take into account exclusively the salary or professional income received by the claimant in respect of his/her last activity as an employed or self-employed person under its legislation. This principle has been criticised repeatedly, because the calculation modus could prove disadvantageous for an unemployed person with an international insurance career, especially if a higher income was achieved abroad. The legislation did not share these critical considerations; instead it gave priority to the aspect of simplifying administration with its rule.

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The FreSsco Analytical Report 2015 (Assessment of the impact of amendments to the EU social security coordination rules on aggregation of periods or salaries for unemployment benefits) is in favour of taking into account income earned in a previous Member State. 2. Relevance of a reference period (para. 2)

It is quite common for national legislation to require the taking into account 3 of salary within a specific reference period. In the event the unemployed person received an income under the legislation of another Member State during a part of this period, account is nevertheless only taken of the income received in the State of last employment or self-employment. 3. Special rule for frontier workers (para. 3)

Reg. No. 1408/71 contained no provision for the frontier worker for whom 4 benefits are to be provided by the institution of the State of residence. In practice the decision of the CJEU in the Case Fellinger was followed (CJEU, Case 67/79, EU:C:1980:59). The CJEU decided in this judgement that the competent institution of the Member State of residence, whose national legislation provides that the calculation of benefits should be based on the amount of the previous wage or salary, shall calculate those benefits taking into account the wage or salary received by the worker in the last employment held by him in the Member State in which he was engaged immediately prior to becoming unemployed (para. 9 of the judgement). This case law of the CJEU was adopted in para. 3 (see also in this respect Cornelissen, in: European Journal of Social Security, 2007, 187, 198 et seq.). In the case of unemployed persons to whom Art. 65 (5)(a) is applicable, the institution of the place of residence shall pursuant to Reg. No. 987/2009 take into account the salary or professional income received by the person concerned in the Member State to whose legislation he/she was subject during the last period of employment or self-employment. The legislation of the Member States normally provides for a ceiling within the framework of calculating both contributions and benefits, whereby contributions are levied from the income that is taken into consideration up to the assessment ceiling for contributions. This is also decisive for the income used for assessment of the benefit. In the proceeding Grisvard and Kreitz (CJEU, Case C-201/91, EU:C:1992:368) the two French plaintiffs residing in France contested the decision of the institution competent for them as frontier workers to take into account the wages they had received in the Federal Republic of Germany only up to the ceiling for assessing contributions. The CJEU agreed with the legal opinion of the plaintiffs. Because pursuant to the (former) provision in Art. 71 (1)(a ii)(b ii) of Reg. No. 1408/71 a frontier worker who is wholly unemployed shall receive benefits in accordance with the legislation of the Member State in whose territory he/she resides as though they had been subject to that Maximilian Fuchs

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legislation while last employed. These provisions clearly require the legislation of the Member State of residence alone to be applied and not, therefore, the legislation of the State of employment, including any rules it lays down on ceilings (para. 16 of the judgement). As the contents of Art. 65 (5) correspond with the former provisions of Art. 71, existing case law can also claim validity under the new legislation (likewise Cornelissen, in: European Journal of Social Security, 2007, 187, 199 et seq.). The currency of the foreign income that has to be taken into account by the institution of the State of residence must be converted if it is not quoted in Euros. Pursuant to Art. 90 Reg. No. 987/2009 the exchange shall be the reference rate published by the European Central Bank. 4. Taking into account of members of the family 5

The amount of the unemployment benefits is frequently subject to the existence of family members. The necessity of taking members of the family into account arose in compliance with former legislation from Art 68 (2) Reg. No. 1408/71. No amendments have been made to this legal position. Its legal basis is now found in Reg. No. 987/2009. Pursuant to Art. 54 (3) (1) Reg. No. 987/2009 the members of the family of the person entitled to the benefit who are living in the territory of a Member State other than the competent Member State shall be taken into account when calculating the benefit. This shall, however, only apply if in the Member State in which the members of the family reside another person is entitled to unemployment benefits that is calculated taking members of the family into account (Art. 54 (3) (2) Reg. No. 987/2009). With regard to the identical provision of Art. 68 (2) Reg. No. 1408/71 the CJEU held in the judgement Stallone (CJEU, Case C-212/00, EU:C:2001:548 para. 16) that an unemployed person whose family resides, as he does, in the host Member State may not be treated differently from an unemployed person the members of whose family reside in the territory of another Member State. The aim of Art. 68(2) Reg. No. 1408/71 is to avoid indirect discrimination against migrant workers, since they are essentially the ones who will be affected by a condition that the members of their families reside on national territory. That provision thus gives specific expression to the rule of equal treatment in Art. 4. The term member of the family is defined in Art. 1 (i) (see in this respect Art. 1 para. 16 above). Art. 2 (2) Reg. No. 987/2009 is applicable for determining the members of the family to be taken into consideration. It emphasises for the institutions to without delay provide all data necessary for establishing and determining the rights and obligations. In future this will be carried out by means of electronic data exchange (Art. 4 Reg. No. 987/2009). The Administrative Commission decided that the communication of the document relating to members of the family after the start of the period of unemployment for which benefit is payable shall not have the effect of postponing the starting of the acquisition of entitlement to un-

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employment benefit at the increased rate for dependent members of the family (cf. Decision No. U1 from 12.6.2009 OJ EU C 106/42).

Article 63 Special provisions for the waiving of residence rules For the purpose of this Chapter, Article 7 shall apply only in the cases provided for in Articles 64, 65 and 65 a and within the limits prescribed therein.

The export of cash benefits is embodied as a principle in Art. 7 – in fulfilment 1 of the objective of Art. 48 (b) TFEU. At the same time the provision includes a proviso whereby provisions in the Reg. can provide for something else. In this sense Art. 63 constitutes a restriction on and an exception to the basic guaranteed export of cash benefits in Art. 7. Because it guarantees the export only in the cases provided for by Art. 64, 65 and 65 a and within the limits prescribed therein. One may criticise the restrictions of Art. 63 and the provisions of Art. 64, 65 2 and 65 a linked with them in the light of freedom of movement. Nevertheless, there is no violation of primary law in Art. 63. Nor do the reasoning and results in the decisions de Cuyper (Case C-406/04, EU:C:2006:491, cf. also Art. 3 para. 23 above in this respect) and Petersen (Case C-228/07, EU:C:2008:494, cf. also Art. 3 para. 15 above in this respect) contradict this. The CJEU does indeed also consider the residence clauses of the national legislation even in the case of unemployment benefits – as these decisions indicate. In the Case de Cuyper, however, it did not recognise a violation of the freedom of movement rule in Art. 18 EC (= Art. 21 TFEU), because the residence clause was objectively justified. The Case Petersen involved the advance granted to unemployed persons who have applied for the grant of an invalidity benefit. The Court assessed this benefit in the light of Art. 30 EC (now Art. 45 TFEU). It justified this with the argument that the case in question was not covered by the codified facts in Art. 69 and 71 Reg. No. 1408/71 (now Art. 64 and 65) (cf. para. 39 of the Petersen judgement). It can be concluded from the above that the CJEU regards the exemption rule of the Reg., which restricts the export of benefits, as being compatible with primary law.

Article 64 Unemployed persons going to another Member State (1) A wholly unemployed person who satisfies the conditions of the legislation of the competent Member State for entitlement to benefits, and who goes to another Member State in order to seek work there, shall retain his/her entitlement to unemployment benefits in cash under the following conditions and within the following limits:

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before his departure, the unemployed person must have been registered as a person seeking work and have remained available to the employment services of the competent Member State for at least four weeks after becoming unemployed. However, the competent services or institutions may authorise his departure before such time has expired; (b) the unemployed person must register as a person seeking work with the employment services of the Member State to which he has gone, be subject to the control procedure organised there and adhere to the conditions laid down under the legislation of that Member State. This condition shall be considered satisfied for the period before registration if the person concerned registers within seven days of the date on which he ceased to be available to the employment services of the Member State which he left. In exceptional cases, the competent services or institutions may extend this period; (c) entitlement to benefits shall be retained for a period of three months from the date when the unemployed person ceased to be available to the employment services of the Member State which he left, provided that the total duration for which the benefits are provided does not exceed the total duration of the period of his entitlement to benefits under the legislation of that Member State; the competent services or institutions may extend the period of three months up to a maximum of six months; (d) the benefits shall be provided by the competent institution in accordance with the legislation it applies and at its own expense.

(2) If the person concerned returns to the competent Member State on or before the expiry of the period during which he/she is entitled to benefits under paragraph 1(c), he/she shall continue to be entitled to benefits under the legislation of that Member State. He/she shall lose all entitlement to benefits under the legislation of the competent Member State if he/she does not return there on or before the expiry of the said period, unless the provisions of that legislation are more favourable. In exceptional cases the competent services or institutions may allow the person concerned to return at a later date without loss of his/her entitlement. (3) Unless the legislation of the competent Member State is more favourable, between two periods of employment the maximum total period for which entitlement to benefits shall be retained under paragraph 1 shall be three months; the competent services or institutions may extend that period up to a maximum of six months. (4) The arrangements for exchanges of information, cooperation and mutual assistance between the institutions and services of the competent Member State and the Member State to which the person goes in order to seek work shall be laid down in the Implementing Regulation. Article 55 Reg. No. 987/2009 Conditions and restrictions on the retention of the entitlement to benefits for unemployed persons going to another Member State (1) In order to be covered by Article 64 and Art. 65 a of the basic Regulation, the unemployed person going to another Member State shall inform the competent institution prior to his/her departure and request a document certifying that he/she retains his/her entitlement to benefits under the conditions laid down in Article 64(1)(b) of the basic Regulation. That institution shall inform the person concerned of his obligations and shall provide the abovementioned document which shall include the following information: (a) the date on which the unemployed person ceased to be available to the employment services of the competent State; (b) the period granted in accordance with Article 64(1)(b) of the basic Regulation in order to register as a person seeking work in the Member State to which the unemployed person has gone; (c) the maximum period during which the entitlement to benefits may be retained in accordance with Article 64(1)(c) of the basic Regulation; (d) circumstances likely to affect the entitlement to benefits. (2) The unemployed person shall register as a person seeking work with the employment services of the Member State to which he goes in accordance with Article 64(1)(b) of the basic Regulation and shall provide

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Article 64 the document referred to in paragraph 1 to the institution of that Member State. If he has informed the competent institution in accordance with paragraph 1 but fails to provide this document, the institution in the Member State to which the unemployed person has gone shall contact the competent institution in order to obtain the necessary information. (3) The employment services in the Member State to which the unemployed person has gone to seek employment shall inform the unemployed person of his obligations. (4) The institution in the Member State to which the unemployed person has gone shall immediately send a document to the competent institution containing the date on which the unemployed person registered with the employment services and his new address. If, in the period during which the unemployed person retains entitlement to benefits, any circumstance likely to affect the entitlement to benefits arises, the institution in the Member State to which the unemployed person has gone shall send immediately to the competent institution and to the person concerned a document containing the relevant information. At the request of the competent institution, the institution in the Member State to which the unemployed person has gone shall provide relevant information on a monthly basis concerning the follow-up of the unemployed person’s situation, in particular whether the latter is still registered with the employment services and is complying with organised checking procedures. (5) The institution in the Member State to which the unemployed person has gone shall carry out or arrange for checks to be carried out, as if the person concerned were an unemployed person obtaining benefits under its own legislation. Where necessary, it shall immediately inform the competent institution if any circumstances referred to in paragraph 1(d) arise. (6) The competent authorities or competent institutions of two or more Member States may agree amongst themselves specific procedures and time-limits concerning the follow-up of the unemployed person’s situation as well as other measures to facilitate the job-seeking activities of unemployed persons who go to one of those Member States under Article 64 of the basic Regulation. (7) Paragraphs 2 to 6 shall apply mutatis mutandis to the situation covered by Article 65a(3) of the basic Regulation.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Restriction of the export of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Structure of the provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Export of the benefit (para. 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Seeking work abroad in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Availability in the competent State after becoming unemployed c) Availability of the unemployed person vis-à-vis the employment services of the Member State to which he/she has gone to seek work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Continued provision of the unemployment benefit . . . . . . . . . . . . . . . . e) Provision of benefits by the competent institution . . . . . . . . . . . . . . . . 2. Retention/loss of entitlement (para. 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Repeated search for work abroad in the EU (para. 3) . . . . . . . . . . . . . . . . III. Administrative procedure (para. 4 in conjunction with Art. 55 Reg. No. 987/2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 2 3 3 3 5 6 7 9 10 11 12

I. Spirit and Purpose 1. Restriction of the export of benefits

Art. 64 lays down the conditions for the export of cash benefits in the event of 1 unemployment. The provision includes a derogation from the fundamental unrestricted export of cash benefits as laid down in Art. 7, although with a view to Art. 64 unemployment benefits in cash are purposely not mentioned here. This derogation reflects the concern of the Member States that the necessary support and control of the search for work by unemployed persons abroad would not be pursued with the same intensity as in the home State. This attitude and the re-

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strictive design of the export of benefits gives rise to have been criticised for years (see also Art. 63 para. 2). Despite this the legislation of Reg. No. 883/2004 has adhered to the former legal position (see in this respect Pennings, Koordinierung der Leistungen bei Arbeitslosigkeit nach der Verordnung 883/2004, in: Eichenhofer (Hrsg.), 50 Jahre nach ihrem Beginn, 2009, p. 265, 281 et seq.). 2. Structure of the provision 2

The basic principle embodied in Art. 64 comprises two core provisionsions: An unemployed person can go abroad to seek work and still retain his/her entitlement to benefits for a period of maximum three months, provided he/she fulfils the conditions laid down in para. (1) (a) to (c). – The unemployed person retains his/her entitlement vis-à-vis the competent Member State if he/she returns to it later on before expiry of the set period pursuant to (c) (normally three months) (para. 2). –

In contrast to former law, the benefit is provided by the competent institution during the stay abroad in accordance with the legislation it applies. II. Commentary 1. Export of the benefit (para. 1) a) Seeking work abroad in the EU

Eligibility to make a claim applies to a wholly unemployed person who formerly pursued an activity as an employed or self-employed person and who is entitled to benefits in accordance with the legislation of the competent State (see Art. 61 para. 10 above for the term competent State). Only a wholly unemployed person is entitled to benefits pursuant to the wording of the provision. This would mean that in the case of partial unemployment the entitlement would have to be refused. An interpretation bearing in mind the spirit and purpose of freedom of movement and the intention of Art. 64 would have to affirm the benefit export also for partial unemployment. 4 Basically provision of the benefit is, according to para. 1, conditional on the person concerned moving his/her residence or place of stay abroad in order to seek work. Family interests should therefore also be taken into consideration. The freedom of movement provisions of TFEU and the secondary law these gave rise to (in particular Directive 2004/38/EC) indicate that taking family interests into consideration is a key issue. It is therefore to be welcomed that Recommendation No. U2 of the Administrative Commission from 12.6.2009 (OJ EU from 24.4.2010 C 106/51) affirms authorisation for departure before expiry of the four-week period stipulated in Art. 64 (1)(a) if the person concerned fulfils all other conditions of Art. 64 and if he/she leaves to accompany his/her spouse or partner who has taken up employment in another Member State. The 3

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term partner is to be defined in accordance with the legislation of the competent Member State. b) Availability in the competent State after becoming unemployed

As an essential condition for the transfer of the benefit abroad para. 1 (a) re- 5 quires that the claimant remains available to the employment services of the competent State for four weeks before departure. (a) states this condition exhaustively. National legislation may not establish any additional conditions (CJEU, Case C-215/00 (Rydergård), EU:C:2002:111 para. 18). On the other hand this provision enables the authorities of the competent Member State to satisfy themselves that a worker is in fact unemployed and so offer him/her work before he/she leaves to seek work in another Member State at its expense (para. 30 of the Rydergård judgement). Whether the claimant is unemployed and whether he/she makes himself/herself available to the employment services of the competent Member State for a period of four weeks are questions to be verified and answered by the authorities of the competent Member State in accordance with its legislation (para. 21 of the Rydergård judgement). The CJEU proclaimed it was not necessary to require that the period of four weeks be unbroken (para. 31 of the Rydergård judgement). However, the competent institution may authorise departure before the four week period has expired (a)(2). c) Availability of the unemployed person vis-à-vis the employment services of the Member State to which he/she has gone to seek work

Pursuant to para. 1 (b) continuation of the provision of unemployment benefit 6 is conditional on the unemployed person registering with the employment services of the Member State in which he/she is seeking employment, subjecting himself/herself to the control procedure there and adherence to the conditions laid down under the legislation of that Member State. The person concerned must register within seven days of the date on which he/she ceased to be available to the employment services of the Member State which he/she left. S. 3 provides for the competent employment services or institutions granting an extension of this period in exceptional cases. d) Continued provision of the unemployment benefit

Cumulative fulfilment of the conditions laid down in (a) and (b) gives rise to 7 the legal consequence of retention of the entitlement to benefits for three months (c). Of course, this three-month period only applies if it does not exceed the total duration of the period of entitlement provided for under the legislation of the competent State. The three-month period may be extended to six months by the competent employment services or the competent institutions. Logically a seasonal worker (no longer defined in the Reg. in contrast to former law) must return at the end of the season, even if the three-month period has not expired.

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The facts and legal consequence in para. 1 are only deemed fulfilled if the unemployed person goes to a Member State other than the competent State. For this reason the provision does not apply to frontier workers (Art. 65) receiving unemployment benefits in their State of residence who subsequently go to the State of employment in order to settle there (CJEU, Case 145/84 (Cochet), EU:C:1985:111 para. 16). e) Provision of benefits by the competent institution

9

By derogation from former law (Art. 70 (1)(1) Reg. No. 1408/71), the benefits are provided by the competent institution in accordance with the legislation it applies and at its own expense (d). 2. Retention/loss of entitlement (para. 2)

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While para. 1 codifies the conditions for the export of the benefit, para. 2 lays down the conditions for the retention of the entitlement to the benefit in the competent State in the event the unemployed person returns. This provides that continuation of the entitlement is fundamentally linked to the return of the unemployed person to the competent State at the latest on expiry of the period prescribed in para. 1 (c) (i.e. normally three months). However, national legislation may provide for a more favourable rule (para. (2)(2)). In compliance with para. 2 (3) the competent employment services or institution may allow the person concerned to return at a later date. In its decision in the Case Coccioli (CJEU, Case 139/78, EU:C:1979:75 para. 9 et seq.) concerning the former but nevertheless identical provision of Art 69 (2)(2) Reg. No. 1408/71, the CJEU gave this exemption provision a wider scope. Namely, that the request for an extension of the prescribed period can be lodged even after this period has expired, because Art. 64 (2)(3) contains no rule concerning the time of such request. The exceptional cases that may justify an extension of the prescribed period were regarded by the CJEU as including such that prevent not only the return of the unemployed person to the competent State within the period prescribed, but equally the lodging of the request for extension before expiry of that period. Furthermore, the CJEU stresses that it is for the competent services or institutions of the Member States to assess in each individual case the factual circumstances constituting an exceptional case as relied on in support of the request for an extension of the prescribed period (para. 8 of the Coccioli judgement). In the Case Testa the CJEU went on to stress that although the competent public institutions enjoy wide discretion when deciding on whether to extend the period laid down in art 64 (2)(2), when exercising that discretionary power they must take account of the principle of proportionality which is a general principle of Community law. In order to correctly apply that principle each individual case must take into consideration the extent to which the period has been extended, the reason for the delay in returning and the seriousness of the legal consequences arising from

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such delay (CJEU, joint Cases 41/79, 121/79 and 796/79 (Testa), EU:C: 1980:163 para. 21). Non-compliance with the condition to return within the period prescribed results in the loss of all entitlement to benefits (para. 2(2)). The CJEU affirmed the lawfulness of imposing this legal consequence in the Case Testa (para. 13-16 of the judgement). 3. Repeated search for work abroad in the EU (para. 3)

In accordance with former legislation (Art. 69 (3) Reg. No. 1408/71) the pro- 11 visions of para. 1 (1) could be invoked only once between two periods of unemployment. The new provision of para. 3 provides that an unemployed person can go abroad repeatedly, provided he/she does not exceed the prescribed three months (or up to six months if so authorised). III. Administrative procedure (para. 4 in conjunction with Art. 55 Reg. No. 987/2009)

Correct and effective coordination of the export of the benefit requires a flow 12 of information between the two employment services/competent institutions and the unemployed person. Art. 64 (4) passes on responsibility for the arrangements of this exchange of information and cooperation to Art. 55 Reg. No. 987/2009. Document U2 has to be used.

Article 65 Unemployed persons who resided in a Member State other than the competent State (1) A person who is partially or intermittently unemployed and who, during his/her last activity as an employed or self-employed person, resided in a Member State other than the competent Member State shall make himself/herself available to his/her employer or to the employment services in the competent Member State. He/she shall receive benefits in accordance with the legislation of the competent Member State as if he/she were residing in that Member State. These benefits shall be provided by the institution of the competent Member State. (2) A wholly unemployed person who, during his/her last activity as an employed or selfemployed person, resided in a Member State other than the competent Member State and who continues to reside in that Member State or returns to that Member State shall make himself/herself available to the employment services in the Member State of residence. Without prejudice to Article 64, a wholly unemployed person may, as a supplementary step, make himself/herself available to the employment services of the Member State in which he/she pursued his/her last activity as an employed or self-employed person. An unemployed person, other than a frontier worker, who does not return to his/her Member State of residence, shall make himself/herself available to the employment services in the Member State to whose legislation he/she was last subject.

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Part 2: Regulation (EC) No 883/2004 (3) The unemployed person referred to in the first sentence of paragraph 2 shall register as a person seeking work with the competent employment services of the Member State in which he/she resides, shall be subject to the control procedure organised there and shall adhere to the conditions laid down under the legislation of that Member State. If he/she chooses also to register as a person seeking work in the Member State in which he/she pursued his/her last activity as an employed or self-employed person, he/she shall comply with the obligations applicable in that State. (4) The implementation of the second sentence of paragraph 2 and of the second sentence of paragraph 3, as well as the arrangements for exchanges of information, cooperation and mutual assistance between the institutions and services of the Member State of residence and the Member State in which he/she pursued his/her last occupation, shall be laid down in the Implementing Regulation. (5) (a) The unemployed person referred to in the first and second sentences of paragraph 2 shall receive benefits in accordance with the legislation of the Member State of residence as if he/she had been subject to that legislation during his last activity as an employed or self-employed person. Those benefits shall be provided by the institution of the place of residence. (b) However, a worker other than a frontier worker who has been provided benefits at the expense of the competent institution of the Member State to whose legislation he/she was last subject shall firstly receive, on his return to the Member State of residence, benefits in accordance with Article 64, receipt of the benefits in accordance with (a) being suspended for the period during which he/she receives benefits under the legislation to which he/she was last subject. (6) The benefits provided by the institution of the place of residence under paragraph 5 shall continue to be at its own expense. However, subject to paragraph 7, the competent institution of the Member State to whose legislation he/she was last subject shall reimburse to the institution of the place of residence the full amount of the benefits provided by the latter institution during the first three months. The amount of the reimbursement during this period may not be higher than the amount payable, in the case of unemployment, under the legislation of the competent Member State. In the case referred to in paragraph 5(b), the period during which benefits are provided under Article 64 shall be deducted from the period referred to in the second sentence of this paragraph. The arrangements for reimbursement shall be laid down in the Implementing Regulation. (7) However, the period of reimbursement referred to in paragraph 6 shall be extended to five months when the person concerned has, during the preceding 24 months, completed periods of employment or self-employment of at least 12 months in the Member State to whose legislation he/she was last subject, where such periods would qualify for the purposes of establishing entitlement to unemployment benefits. (8) For the purposes of paragraphs 6 and 7, two or more Member States, or their competent authorities, may provide for other methods of reimbursement or waive all reimbursement between the institutions falling under their jurisdiction. Article 56 Reg. No. 987/2009 Unemployed persons who resided in a Member State other than the competent State (1) Where the unemployed person decides, in accordance with Article 65(2) or Article 65a(1) of the basic Regulation, to make himself/herself also available to the employment services in the Member State not providing the benefits, by registering there as a person seeking work, he/she shall inform the institution and the employment services of the Member State providing the benefits. At the request of the employment services of the Member State not providing the benefits, the employment services in the Member State that is providing the benefits shall send the relevant information concerning the unemployed person’s registration and his/her search for employment. (2) Where the legislation applicable in the Member States concerned requires the fulfilment of certain obligations and/or job-seeking activities by the unemployed person, the obligations and/or job-seeking activities by the unemployed person in the Member State providing the benefits shall have priority.

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Article 65 The non-fulfilment by the unemployed person of all the obligations and/or job-seeking activities in the Member State which does not provide the benefits shall not affect the benefits awarded in the other Member State. (3) For the purposes of applying Article 65(5)(b) of the basic Regulation, the institution of the Member State to whose legislation the worker was last subject shall inform the institution of the place of residence, when requested to do so by the latter, whether the worker is entitled to benefits under Article 64 of the basic Regulation. Article 70 Reg. No. 987/2009 Reimbursement of unemployment benefits If there is no agreement in accordance with Article 65(8) of the basic Regulation, the institution of the place of residence shall request reimbursement of unemployment benefits pursuant to Article 65(6) and (7) of the basic Regulation from the institution of the Member State to whose legislation the beneficiary was last subject. The request shall be made within six months of the end of the calendar half-year during which the last payment of unemployment benefit, for which reimbursement is requested, was made. The request shall indicate the amount of benefit paid during the three or five month-period referred to in Article 65(6) and (7) of the basic Regulation, the period for which the benefits were paid and the identification data of the unemployed person. The claims shall be introduced and paid via the liaison bodies of the Member States concerned. There is no requirement to consider requests introduced after the time-limit referred to in the first paragraph. Articles 66(1) and 67(5) to (7) of the implementing Regulation shall apply mutatis mutandis. From the end of the 18-month period referred to in Article 67(5) of the implementing Regulation, interest may be charged by the creditor institution on outstanding claims. The interest shall be calculated in accordance with Article 68(2) of the implementing Regulation. The maximum amount of the reimbursement referred to in the third sentence of Article 65(6) of the basic Regulation is in each individual case the amount of the benefit to which a person concerned would be entitled according to the legislation of the Member State to which he was last subject if registered with the employment services of that Member State. However, in relations between the Member States listed in Annex 5 to the implementing Regulation, the competent institutions of one of those Member States to whose legislation the person concerned was last subject shall determine the maximum amount in each individual case on the basis of the average amount of unemployment benefits provided under the legislation of that Member State in the preceding calendar year.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Partial unemployment (para. 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Separation of the State of employment and State of residence (para. 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Frontier workers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Unemployed person, other than a frontier worker . . . . . . . . . . . . . . . . c) Atypical frontier workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Registration obligations of the unemployed person (para. 3) . . . . . . . 4. Competence for the provision of benefits (para. 5) . . . . . . . . . . . . . . . . . . a) Frontier workers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) An unemployed person, other than a frontier worker. . . . . . . . . . . . . 5. Reimbursement of benefits (para. 6-8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Right to other benefits while receiving unemployment benefits . . . .

1 4 4 7 7 8 10 11 12 13 15 17 18

I. Spirit and Purpose

As is the case with its predecessor provision in Art. 71 Reg. No. 1408/71, 1 comprehension and application of Art. 65 causes great difficulties. As already indicated in the title, the subject matter of this provision concerns the situation in which the unemployed person resided in a Member State other than the competent State. This constellation can, however, prove very heterogenic. Coordination legislation must take account of this heterogeneity, both in respect to the conditions and the legal consequences. The entitlement included in the former Art. 71 Reg. No. 1408/71 distinguished between frontier workers and workers

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other than frontier workers. As a result of the case law of the CJEU a genuine frontier worker was distinguished from a mostly atypical form of unemployed frontier worker. Furthermore, Art. 71 Reg. No. 1408/71 differentiated between frontier workers who were wholly unemployed and those who were partially unemployed. The wholly unemployed frontier worker received benefits in accordance with the legislation of the State of residence. While in contrast a worker, other than a frontier worker, was given a choice. Primarily such a person should apply to the institution of the State to whose legislation he was last subject. However, Art. 71 offered him/her the option of making him/self available to the employment services in the territory of the Member State in which he/she resides, or to whose territory he returns, so that he/she then receives benefits in accordance with the legislation of that State. The reason for this provision was that there is not automatically such an intensive integration in the State of residence in the case of the atypical frontier worker, because he/she does not return with such regularity to his/her place of residence as the genuine frontier worker. The so-called atypical frontier worker was treated in the same manner by the case law of the CJEU (s. para. 10 below in this respect). He/she, too, could apply to the employment services of the State of employment or residence and thus receive benefits from either one or the other. 2 In its Recommendation from the year 1998 the Commission pleaded for a simple solution, whereby all workers, regardless of where they reside, should be entitled to unemployment benefits in the Member State in which they last worked (cf. Cornelissen, European Journal of Social Security, 2007, 207 et seq. for more detailed treatment of the Recommendation). The cost burden, in particular, was a decisive aspect for this provision. In compliance with the former provisions the costs were borne by the institution of the State of residence, despite that institution having received no contributions most recently. This recommended regulation would above all have resulted in a considerable simplification, because all the aforementioned differentiations would have become superfluous. The Recommendation from the Commission did not receive the necessary unanimity, because the former provision was more advantageous for some countries (cf. Cornelissen, European Journal of Social Security, 2007, 209 in this respect). Luxembourg, for example, benefited from the contributions of frontier workers, although it was the State of residence that provided the benefits if these became unemployed. 3 For this reason Art. 65 has for the most part adopted the old legislation. Atypical frontier workers (see para. 10 below) no longer fall within the scope of the provision. A new provision of importance is that frontier workers may also make themselves available to the employment services of the State of employment. In addition para. 6 and 7 provide to a certain extent for reimbursement visà-vis the institution of the place of residence. Like all provisions of Chapter 6.,

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Art. 65 takes account of the increasing degree of integration of self-employed persons in unemployment insurance. II. Commentary 1. Partial unemployment (para. 1)

Para. 1 refers to a person who is partially or intermittently unemployed. The 4 facts in the Case de Laat are a typical example of the kind of case that falls under para. 1 (CJEU, Case C-444/98, EU:C:2001:165). The Dutch plaintiff living in the Netherlands worked full-time for a company in Belgium. His contract ended at the end of November. Shortly afterwards he started working for the same employer under the terms of a new contract, this time a part-time contract (13 working hours per week). There was a dispute as to whether the person concerned was in fact partially or wholly unemployed. The Dutch court dealing with the Case referred to the CJEU for a ruling on the questions of the interpretation of the content of the terms and under which legislation the terms fell. The CJEU decided that the terms partially unemployed or wholly unemployed within the meaning of Art. 71 Reg. No. 1408/71 (now Art. 65) were to be determined in accordance with Community law (para. 18 of the judgement). When determining the criteria the Court based its arguments on the function of the provisions concerning frontier workers. The fundamental decision in (now) Art. 65 for the Member State of residence is based on the fact that this usually offers the better chance of finding employment. However, this was not so in the case at issue, because there was a close link to the State of employment due to the part-time employment. So in this case partial unemployment and therefore application of para. 1 must be assumed (para. 37 of the judgement). In the Case C-655/13 (Mertens), EU:C:2015:62 a frontier worker was employed on a full-time basis, immediately after that by another employer on a part-time basis. The Court decided that Art. 71(1)(a)(i) Reg. No. 1408/71 (= Art. 65(1) Reg. 883/2004) must be interpreted as meaning that a frontier worker who, immediately after the end of a full-time employment relationship with an employer in a Member State, is employed on a part-time basis by another employer in that same Member State has the status of a partially unemployed frontier worker within the meaning of that provision. The Administrative Commission took account of this case law of the CJEU in 5 its Decision No. U3 from 12.6.2009 (OJ EU from 24.4.2010 C 106/45). No. 1 of the Decision stresses that determination of the nature of unemployment (that is to say partial or whole) shall depend on whether or not any contractual employment link exists or is maintained between the parties and not on the duration of any temporary suspension of the worker’s activity. In conformity with the decision of the CJEU in the Case De Laat, No. 2 of the Decision saw a case of partial unemployment within the meaning of Art 65 (1) and the corresponding competence of the institution of the Member State of employment if a person reMaximilian Fuchs

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mains employed by an undertaking in a State other than the State of residence and his activity is suspended although he can return to his post at any time. On the other hand No. 3 of the Decision provided that in the absence of any contractual link with the Member State of employment – in particular because the employment contract link has been terminated or has expired – whole unemployment is to be assumed. No. 4 of the Decision determines that if a self-employed person does not carry out any professional or trade activity in the Member State of activity, he/she shall be regarded as wholly unemployed in accordance with Art. 65(2) and benefits shall be provided by the institution of the place of residence. 6 If the conditions of Art. 65 (1) are applicable, the claimant must make himself/herself available to the employment services of the competent Member State. He shall then receive benefits in accordance with the legislation of the competent Member State as if he/she were residing in that Member State. 2. Separation of the State of employment and State of residence (para. 2) a) Frontier workers 7

Para. 2 (1) refers to a wholly unemployed person who, during his/her last activity as an employed or self-employed person, resided in a Member State other than the competent Member State. So this provision does not distinguish between frontier workers and persons other than frontier workers. This differentiation is not made until the rule in subpara. 2. The frontier worker is defined in Art. 1 (f) as any person pursuing an activity as an employed or self-employed person in a Member State and who resides in another Member State to which he/she returns as a rule daily or at least once a week. He/she must therefore, in according to s. 1, make himself/herself available to the employment services of the Member State of residence. In contrast to former legislation, para. 2 offers the person concerned the possibility of also making himself/herself available to the employment services of the Member State in which he/she pursued his/her last activity as an employed or self-employed person. As s. 2 makes clear, he/she can of course also go, under the conditions of Art. 64, to another Member State to seek work, (see para. 13 below with regard to the benefits). b) Unemployed person, other than a frontier worker

8

Subpara. 1 (1) also encompasses an unemployed person, other than a frontier worker, because he/she does not return home at least once a week. The basic problem when determining this category of unemployed persons lies in preventing two extremes. The one is to assume the concurrence of the place of employment and the place of residence due to the infrequent return of the person concerned to the place of residence. On the other hand there is a danger of always assuming a disparity between both points of contact if the term place of resi-

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dence is given all too generous a scope, especially if the family of the unemployed person usually continues to stay in another Member State. This difficulty was seen in the case law of the CJEU. In the Case Di Paolo (Case 76/76, EU:C: 1977:32) the Court defined the concept of Member State of residence as being the State “where the worker, although he is occupied in another Member State, continues habitually to reside and where the habitual centre of his interests is also situated”. The fact that the worker has left his family in the said State constitutes evidence that he has retained his residence there, but is not of itself sufficient to allow him the benefits of the exception laid down in Art. 71 (1) (b) (ee) (now Art. 65 (2)(5)(a)). In fact, whenever a worker has a stable employment in a Member State there is a presumption that he resides there, even if he has left his family in another State. Accordingly it is not only the family situation of the worker that should be taken into account, but also the reasons which led him to move and the nature of the work (para. 17 to 20 of the judgement). The Court rejected the opinion that in the event a specific maximum duration is exceeded application of the provision concerning an unemployed person, other than a frontier worker, is excluded (CJEU, Case C-102/91 (Knoch), EU:C:1992:303 para. 27). In fact this status also applies to a person who in the course of his/her last employment transfers his/her residence to another Member State for family reasons and who, after that transfer, no longer returns to the State of employment in order to pursue an occupation there (CJEU, Case 236/87 (Bergemann), EU:C:1988:443 para. 22). In the case of an activity within the framework of an academic exchange scheme the CJEU is of the opinion that the fact that the worker often has long holiday periods during which time he/she stays in his/her home State is not a decisive criterion for determining the place of residence (CJEU, Case C-216/89 (Reibold), EU:C:1990:268). Decision U2 of the Administrative Commission from 12.6.2009 (OJ EU 9 v. 24.4.2010 C 106/43) provided important advice for making the determination. Pursuant to No. 1 of Decision U2 the Administrative Commission sees the scope of Art. 65 as applying, in addition to the genuine frontier worker, in particular (not exhaustive!) to the following group of persons: – the persons referred to in Art. 11(4), – the persons referred to in Art. 13, normally pursuing their activities in the territories of two or more Member States, – persons to whom an agreement as referred to in Art. 16 applies (the inclusion of this group of persons derives from the decision of the CJEU in the Case 454/93 (van Gestel), Slg 1995, I-1707: the Dutch plaintiff who had been given a new post in Belgium and who took up residence there, had agreed continued application of Dutch social security legislation in compliance with Art. 16). Application of Art. 65 could be taken into consideration for these persons if they had resided during their last professional activity in a Member State other than

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the competent State. In compliance with No. 3 of the Decision the State of residence shall be determined in accordance with Art. 11 Reg. No. 987/2009. c) Atypical frontier workers

The term atypical frontier worker goes back to the decision of the CJEU in the Case Miethe (CJEU, Case 1/85, EU:C:1986:243). The plaintiff concerned worked in Aachen, but resided in Belgium where he returned on a daily basis. He therefore fulfilled the conditions of a genuine frontier worker within the meaning of Art. 1 (f). The peculiarity in this Case was that the person concerned had pursued his entire professional career in Germany and therefore the chances of finding employment in this country were clearly better. In the light of the above, the CJEU regarded the plaintiff as an unemployed person, other than a frontier worker, with the consequence that he could also choose to claim unemployment benefits from the institution of the place of employment. The Court refers in its grounds for the decision to the fact that a frontier worker within the meaning of Art. 1 (f) would be entitled solely to benefits from the State of residence if he/she became wholly unemployed, whereby this rule was based on the implicit assumption that such a worker would find in that State the conditions most favourable to the search for new employment. However, the objective pursued cannot be achieved if a wholly unemployed worker, although he/she satisfies the criteria laid down in Art. 1 (f), has in exceptional circumstances maintained in the State in which he/she was last employed personal and business links of such a nature to give him/her a better chance of finding new employment there. 10a The Court rejected the frequently held view that the case law concerning Miethe should also be applied under Reg. No. 883/2004 (Cornelissen, European Journal of Social Security, 2007, p. 187, 211). In the Case Jeltes et al. (C-443/11) the Court rejected the entitlement of the Dutch plaintiffs who worked in the Netherlands but resided in Belgium and satisfied the criteria for a genuine frontier worker. The Court stressed in this respect that the possibility of claiming benefits from the institution of the last State of employment in accordance with the judgement in the Case Miethe was not apparent in the wording of Art. 65 (2). In fact the wholly unemployed frontier worker must make himself/herself available to the employment services of the Member State of residence not in the sense of possibility but as an obligation. Only as a supplementary step can he/she can make himself/herself available to the employment services of Member State of his/her last employment. According to Art. 56 (1) Reg. No. 987/2009 this registration applies only to the seeking of work. The Court thus concluded that continuation of the judgement in the Case Miethe is ruled out under Reg. No. 883/2004. The legislature could have drafted Art. 65 in the light of the principle of the Case Miethe had it wished to, but in fact refrained from doing so. This reflects the express intention of the legislation to delegate sole competence for the benefit to the institution of the Member State of residence. The 10

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correctness of this interpretation is corroborated by making reference to the preparatory work of the two Coordination Regulations. On the one hand the proposal of the European Commission to regard the State of last employment as being competent was unsuccessful. In addition the European Parliament had proposed, in a report from 10 June 2008, to specify in a recital in the preamble to that regulation that the right of the worker to register with the employment services of the State where he was last employed was intended to promote the mobility of employees and unemployed persons but that the worker was entitled to only one benefit, in the Member State of residence. The CJEU also refused to accept the claims of plaintiffs whereby the unem- 10b ployment benefit paid in the Netherlands being higher than that paid by the Belgian authorities, constitutes a violation of Art 45 TFEU and the right to freedom of movement it contains. The Court made reference here to its noted case law whereby the substantive and procedural differences between the social security schemes of the Member States and hence also between the resulting rights cannot, in view of an absence of harmonisation, guarantee to an insured person that a move to another Member State will be neutral as regards social security. 3. Registration obligations of the unemployed person (para. 3)

Para. 3 requires that in particular those unemployed persons referred to in 2 11 (1) shall register with the competent employment services of the Member State of residence, shall be subject to the control procedure organised there and shall adhere to the conditions laid down under the legislation of that Member State. The same applies according to para. 2 (2) if the unemployed person has decided to seek work in the State in which he/she pursued his/her last activity as an employed or self-employed person. He is subject to the same obligations in this Member State. Art. 65 (4) decrees that the arrangements for the aforementioned shall be laid down in Art. 56 Reg. No. 987/2009. 4. Competence for the provision of benefits (para. 5)

Para. 5 determines which institution is to provide the unemployment benefits. 12 A difference must be made here as follows: a) Frontier workers

In compliance with para. 5 (a) the genuine frontier worker shall receive bene- 13 fits in accordance with the legislation of the Member State of residence as if he/she had been subject to that legislation during his/her last activity as an employed or self-employed person. Even if he/she has exercised the possibility of Art. 65 (2)(2) to make himself/herself available to the employment services of the Member State in which he/she pursued his/her last activity as an employed or self-employed person as a supplementary step, this does not affect the competence of the institution of the place of residence to provide benefits.

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The separation of the State of residence and the State of employment must be given at the time the person concerned becomes unemployed. Should the unemployed person not move to another Member State until after such time, the conditions of Art. 65 (5)(a) are not satisfied. (CJEU, Case 128/83 (Guyot), EU:C: 1984:312 para. 9). If an unemployed person settles in the State of employment after he/she has received unemployment benefits from the institution of the Member State of residence in compliance with the conditions laid down in Art. 65 (1)(a), the requirement of the separation of the State of employment and the State of residence is no longer necessary. So the provision of Art. 64 concerning the export of the benefit does not apply (CJEU, Case 145/84 (Cochet), EU:C:1985:111 para. 16). In this case the unemployed person is entitled to unemployment benefits in accordance with the legislation of the State of employment. The latter must begin, or begin again, to assume its obligations in relation to unemployment benefits. Consequently, benefits paid by the State in which he was temporarily resident must be taken into account for the application of the legislation of the State where he/she was last employed (CJEU, Case C-131/95 (Huijbrechts), EU:C:1997:147 para. 28). The aforementioned judgments in the Cases Cochet and Huijbrechts, delivered under the former legislation of Art. 71 Reg. No. 1408/71, are also applicable under the new legislation (likewise Cornelissen, European Journal of Social Security, 2007, 187, 216 et seq.). b) An unemployed person, other than a frontier worker

The competence of the institution of the place of residence for benefits also applies to the unemployed person, other than frontier worker, who continues to reside or returns to this Member State. If, however, he/she exercises his/her right of choice and does not return to the Member State of residence, but instead makes himself/herself available to the employment services of the Member State of employment, the benefit is then provided by the competent institution of the State of employment or the State where he/she last pursued his/her last activity as a self-employed person. 16 Another constellation for the unemployed person, who was not a frontier worker, can be derived from para. 5 (b). (b) only refers to workers. However, it is to be assumed that an editorial error is concerned here. This rule must of course also apply to the self-employed. It ensues from this provision that a worker or self-employed person who has become unemployed can initially apply to the competent institution of the Member State to whose legislation he/she was last subject and from which he/she can claim benefits. If he/she returns subsequently to the Member State of residence, he/she then becomes subject to the benefit rules laid down in Art. 64. In other words, he/she is treated as if he/she continues to seek employment in a Member State other than the competent Member State. He/she therefore receives unemployment benefits from the institution of the State in which he/she pursued his/her last activity as an employed or self-employed person. As double receipt of benefits must be prevented, half15

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sentence of (b) provides that receipt of the benefits in accordance with (a) shall be suspended for the period in which he/she receives benefits under the legislation to which he/she was last subject. 5. Reimbursement of benefits (para. 6-8)

Para. 6 (1) determines that the benefits provided by the institution of the place 17 of residence under paragraph 5 shall continue to be at its own expense. This cost regulation also applied under former law without any express provision. The following reimbursement provisions are, however, new. In accordance with para. 6 (2) the competent institution of the Member State to whose legislation the person concerned was last subject shall reimburse to the institution of the place of residence the full amount of the benefits provided by the latter institution during the first three months. However, the amount of the reimbursement may not be higher than the amount that would have applied under the competent institution. For this reason para. 6 (3) restricts the amount of reimbursement to this amount. And equally logically para. 6 (4) provides that in the case referred to in paragraph 5(b), the period during which benefits are provided under Art. 64 shall be deducted from the period referred to in the second sentence of this para. In accordance with para. 7 the period of reimbursement referred to in para. 6 shall be extended to five months when the person concerned has, during the preceding 24 months, completed periods of employment or self-employment of at least 12 months in the Member State to whose legislation he/she was last subject. However, this only applies if such periods would qualify for the purposes of establishing entitlement to unemployment benefits. In accordance with para. 8. Member States may provide for other methods of reimbursement or waive all reimbursement. Details and modalities for practical handling of the reimbursement rules are determined in Art. 70 Reg. No. 987/2009 and Decision No. U4 of the Administrative Commission from 13.12.2011 (OJ from 25.2.2012 C 57/4). 6. Right to other benefits while receiving unemployment benefits

An answer to the question concerning competence for providing benefits 18 where the unemployed person is receiving unemployment benefits under the legislation of the Member State of residence in compliance with Art. 65 is given in the new provision of Art. 11 (3)(c) (see Art. 11 para. 16 above in this respect). This provides that the institution of the Member State of residence is also competent for providing the other benefits. In other words the institution of the Member State of residence is competent for providing sickness, maternity or paternity benefits, invalidity benefits and family benefits. The reimbursement provisions provided for in Art. 65 (6)(7) are be regarded as (partial) compensation for the provision of the aforementioned benefits.

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Article 65 a Special provisions for wholly unemployed self-employed frontier workers where no unemployment benefits system covering selfemployed persons exists in the Member State of residence (1) By way of derogation from Article 65, a wholly unemployed person who, as a frontier worker, has most recently completed periods of insurance as a self-employed person or periods of self-employment recognised for the purposes of granting unemployment benefits in a Member State other than his/her Member State of residence and whose Member State of residence has submitted notification that there is no possibility for any category of self-employed persons to be covered by an unemployment benefits system of that Member State, shall register with and make himself/herself available to the employment services in the Member State in which he/she pursued his/her last activity as a self-employed person and, when he/she applies for benefits, shall continuously adhere to the conditions laid down under the legislation of the latter Member State. The wholly unemployed person may, as a supplementary step, make himself/herself available to the employment services of the Member State of residence. (2) Benefits shall be provided to the wholly unemployed person referred to in paragraph 1 by the Member State to whose legislation he/she was last subject in accordance with the legislation which that Member State applies. (3) If the wholly unemployed person referred to in paragraph 1 does not wish to become or remain available to the employment services of the Member State of last activity after having been registered there, and wishes to seek work in the Member State of residence, Article 64 shall apply mutatis mutandis, except Article 64(1)(a). The competent institution may extend the period referred to in the first sentence of Article 64(1)(c) up to the end of the period of entitlement to benefits. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Availability of the unemployed person vis-à-vis the State of selfemployment (para. 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Competence of the State of last self-employment for providing benefits (para. 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Special case: non-availability in the State of last self-employment (para. 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Administrative procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Art. 65 a was inserted by Reg. No. 465/2012 (OJ L 149/4). It concerns a special provision for self-employed frontier workers. Essentially these persons fall within the scope of Art. 65. Art. 65 (5)(a) provides that frontier workers receive benefits in accordance with the legislation of the Member State of residence. If, however, this State does not provide for an unemployment insurance scheme for self-employed persons, the persons concerned would be without protection against unemployment. This gap has now been filled by Art. 65 a, in that by way of derogation from Art. 65 it declares the Member State to whose legislation the person concerned was last subject as the State competent for providing benefits. This provision gained relevance due to countries such as France, Italy, Belgium, the Netherlands, Greece, Cyprus, Malta and the Baltic States, who have intro400

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duced no unemployment insurance schemes for the self-employed. The provision should be reviewed after two years of implementation and, if necessary, it should be amended (cf. recital 6 of the Preamble). II. Commentary 1. Availability of the unemployed person vis-à-vis the State of selfemployment (para. 1)

Para 1 applies to the wholly unemployed frontier worker (definition of a fron- 2 tier worker in Art. 1 (f)). He/she must “most recently”, i.e. lastly (see also para. 2) have completed periods of insurance (Art. 1 (c)) as a self-employed person or periods of self-employment (Art. 1 (u)) recognised for the purposes of granting unemployment benefits. In accordance with the principle in Art. 65 (1), the person concerned would have to make himself/herself available to the employment services of the Member State of residence. Para. 1 derogates from this if the Member State of residence has submitted notification that there is no unemployment insurance scheme for self-employed persons in its territory. The wording indicates that this provision is only applicable if there is no possibility for any category of self-employed persons to be covered by an unemployment benefit system in the Member State of residence. In this case the person concerned shall register with and make himself/herself available to the employment services in the Member State in which he/she pursued his/her last activity as a self-employed person. Sentence 2, however, provides for the possibility of making oneself available to the employment services of the Member State of residence as a supplementary step. 2. Competence of the State of last self-employment for providing benefits (para. 2)

Where benefit legislation is concerned para. 2 follows the logic of para. 1. If 3 the unemployed self-employed person is required to make himself/herself available to the Member State to whose legislation he/she was last subject and a scheme of unemployment insurance covering the self-employed only exists in this State, he/she must receive benefits from the competent institution of this Member State. 3. Special case: non-availability in the State of last self-employment (para. 3)

A wholly unemployed self-employed person may have good reasons for con- 4 centrating his/her search for work in the territory of the Member State of residence. He/she will certainly not then wish to make himself/herself available to the employment services of the Member State of last activity. The situation is the similar in the case the person concerned does not wish to remain available after a certain time. Para. 3 indicates that this shall in no way result in a loss of

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the right to unemployment benefits. In fact Art. 64 is to be applied respectively in such cases. So the legislation allows a benefit to be exported. Whereby satisfaction of the conditions of Art. 64 (1)(a) is no longer required. This means the unemployed self-employed person is entitled to receive benefits for three months. In accordance with para. 3 (2), the competent institution may extend this period up to the end of the period of entitlement to benefits. 4. Administrative procedure 5

Similar to the case of the export of a benefit in Art. 64, there is an identical need for administrative support for the equated cases of Art. 65 a (3) in order to ensure the entitlement to a benefit vis-à-vis the institution of the competent State of last self-employment. The administrative arrangements for the above are laid down in Art. 55 (1) Reg. No. 987/2009 and Art. 55 (7) Reg. No. 987/2009 – inserted by Reg. No. 465/2012 – which declares Art. 55 (2 to 6) Reg. No. 987/2009 as applicable.

Chapter 7 Pre-retirement benefits

Article 66 Benefits When the applicable legislation makes the right to pre-retirement benefits conditional on the completion of periods of insurance, of employment or of self-employment, Article 6 shall not apply. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Definition of pre-retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Application of the rules of coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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In the past pre-retirement benefits were not included in the coordination. In view of the exhaustive nature of the list of benefits that can be coordinated in Art. 3 (1), this also led to the CJEU not being able to rule a necessity for coordination (cf. in this respect the judgement of the CJEU in the Case C-25/95 (Otte), EU:C:1996:295; see also Art. 3 para.17 above). 2 The new Regulation rectified this legal situation. Recital 33 of the Preamble states in this respect that it is necessary to include statutory pre-retirement schemes within the scope of this Regulation, thus guaranteeing both equal treatment and the possibility of exporting pre-retirement benefits as well as the award of family and health-care benefits to the person concerned, in accordance with the provisions of this Regulation. However, the rule on the aggregation of 1

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periods should not be included. The preamble justifies the exemption of this rule in that only a very limited number of Member States have statutory pre-retirement schemes. II. Commentary 1. Definition of pre-retirement benefits

Art. 1 (x) defines a pre-retirement benefit as meaning all cash benefits, other 3 than an unemployment benefit or an early old-age benefit, provided from a specified age to workers who have reduced, ceased or suspended their remunerative activities until the age at which they qualify for an old-age pension or an early retirement pension. Whereby receipt should not be conditional upon the person concerned being available to the employment services of the competent State. 2. Application of the rules of coordination

Pre-retirement benefits are subject to all rules of coordination, with the excep- 4 tion of the provision of Art. 6. Despite such a restriction, this must be considered as progress in comparison to former law. It ensures, in particular, the export of these benefits in accordance with Art. 7.

Chapter 8 Family benefits Bibliography: Ciucciù/Costa, Regolamento n. 883/2004 Ce di coordinamento dei sistemi nazionali di sicurezza sociale: dispoiszioni applicative e questioni interpretative, RDSS 1/2011, p.171, 196-201; Devetzi, Familienleistungen in der Verordnung (EG) 883/2004, in: Eichenhofer (ed.), 50 Jahre nach ihrem Beginn – Neue Regeln für die Koordinierung sozialer Sicherheit, 2009, p. 291; Marhold, Neuordnung der Koordinierung der Familienleistungen, in: Marhold (ed.), Das neue Sozialrecht der EU, 2005, p. 55; Rieck, Kindergeld und Auslandsunterhalt, NJW 2014, p. 1905; Rief, Zuständigkeit für Familienleistungen – aktuelle EuGHJudikatur und die neue Rechtslage, RdA 2011, p. 480 et seq.

Overview Several changes are immediately apparent if you compare the text of the new 1 Regulation with the provisions of the old Reg. No. 1408/71. Chapter 7 of the old Reg. No. 1408/71, for example, contains both general rules as well as special provisions that are to be applied to different benefits. Art. 73 and 74 of Reg. No. 1408/71 categorically stipulate the country of employment principle while Art. 72 lays down the principle of aggregation. Furthermore, Art. 75(1) prescribes that family benefits shall be provided by the competent institution of the State of employment according to its legislation if the State in which the memFranz Marhold

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bers of the family reside is different from the State in which the concerned person pursues his/her activity as an employed or self-employed person. As a further principle Art. 76 provides for rules of priority in cases of overlapping entitlement to family benefits in several Member States. The concern here is, for example, with parents who are employed in different Member States. However, the aforementioned principles are changed or rather breached for individual benefits. Contrary to the place of employment principle, Art. 72 a lays down special rules for persons who have become fully unemployed in which it stipulates the place of residence as being competent for the provision of family benefits. Chapter 8 includes separate rules for benefits for the dependent children of pensioners and for orphans. 2 The current Chapter 8 of Reg. No. 883/2004 aims at regulating family benefits in their entirety. The following is stated in the recitals that led to the adoption of the new Regulation with regard to the reform of the Chapter concerning family benefits: “(34) Since family benefits have a very broad scope, affording protection in situations which could be described as classic as well as in others which are specific in nature, with the latter type of benefit having been the subject of the judgments of the Court of Justice in Joined Cases C-245/94 and C-312/94 Hoever and Zachow and in Case C-275/96 Kuusijärvi, it is necessary to regulate all such benefits.“ 3 Moreover, the following is laid down in the other recitals: “(35) In order to avoid unwarranted overlapping of benefits there is a need to lay down rules of priority in the case of overlapping of rights to family benefits under the legislation of the competent Member State and under the legislation of the Member State of residence of the members of the family.” “(36) Advances of maintenance allowances are recoverable advances intended to compensate for a parent’s failure to fulfil his/her legal obligation of maintenance to his/her own child, which is an obligation derived from family law. Therefore, these advances should not be considered as a direct benefit from collective support in favour of families. Given these particularities, the coordinating rules should not be applied to such advances of maintenance allowances.“ 4 The new version of the Regulation strives to do away with the mixture of general coordination rules and benefit-related provisions by providing a uniform regulation. As a result, the provisions are now respectively leaner; Chapter 8 of the new Regulation contains just four provisions for family benefits. However, Art. 68, which has been entirely revised in relation to Art. 76 and 77 of Reg. No. 1408/71, does not appear to have fully achieved the declared aim of simplifying the coordination provisions.

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Article 67 Members of the family residing in another Member State A person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his/her family members residing in another Member State, as if they were residing in the former Member State. However, a pensioner shall be entitled to family benefits in accordance with the legislation of the Member State competent for his/her pension. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Definition of terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Member of the family. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Family benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Regulatory effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 2 2 3 5 9

I. Spirit and Purpose

This provision serves to determine the competent Member State for family 1 members residing in a Member State that is different from the State of employment. Sentence 1 of the ruling stipulates that all persons whose family members reside in another Member State are entitled to family benefits in accordance with the legislation of the competent Member State, as if the family members were residing in that Member State. The State of residence is the competent State for economically inactive children (Art. 11(3) (e)). Sentence 2 of the provision regulates the competent Member State for pensioners separately. In this case, it is the Member State competent for the pension. This prevents any discrepancy between the Member State competent for the pension entitlement and the Member State competent for family benefits. II. Commentary 1. Definition of terms a) Person

Uniform rules for all groups of persons have been established with the reform 2 of the provisions concerning family benefits. The differentiation between employed persons, self-employed persons and pensioners has been dropped, so that all persons are now encompassed who fall within the scope of the persons covered and for whom the benefits fall under social security within the scope of the matters covered. There is no legal definition of the term “person” in Reg. No. 883/2004. The use of the new term serves in particular to determine the persons covered (Art. 2) and the realisation of equality of treatment (Art. 4). (Livadiotis, Die neuen europäischen Koordinierungsregeln für die soziale Sicherheit, Spektrum 2010, p. 82, 85; cf. Reuß, Anmerkung zu FG Rheinland-Pfalz, Urteil vom

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23.3.2011 – 2 K 2248/10, EFG 2011, p. 1326). An entitlement to benefits can also arise for children residing in another Member State (Spiegel, Die neue europäische Sozialrechtskoordinierung. Überlegungen zur Verordnung (EG) Nr. 883/2004, ZIAS 2006, p. 85, 138). b) Member of the family

The term member of the family is defined in Art. 1(1)(i), whereby the responsibility for determining the nature of a member of the family lies for the most part with the competent Member State. In the wording of the provision, member of the family means “any person defined or recognised as a member of the family or designated as a member of the household by the legislation under which benefits are provided”. In this respect the CJEU assumes that the spouse is to be regarded as a member of the family in as far as the spouse is entitled to claim child-raising or parental allowances due to his/her own contribution to the child raising task (cf. Case C-245/94 and C-312/94 (Hoever and Zachow), EU:C: 1996:379). 4 Please refer to Case C-363/08 (Slanina), EU:C:2009:732, with regard to the question of whether a divorced parent falls under the term member of the family. 3

c) Family benefits

Pursuant to Art. 1(2)(z) family benefits are to be understood as all benefits in kind or in cash intended to meet family expenses, excluding advances of maintenance and special childbirth and adoption allowances mentioned in Annex 1. This definition expresses the comprehensive formulation under which Reg. No. 883/2004 wishes family benefits to be understood. Reg. No. 1408/71 on the other hand made a distinction between family benefits and family allowances. The first applied to all benefits in kind or in cash intended to meet family expenses, while the latter applied to regular cash benefits that were granted exclusively by reference to the number and where appropriate the age of the members of the family. In practice, this distinction was of importance in particular for the different connections made by international social security systems in the case of child supplements to pensions or orphans’ pensions on the one hand and independent family benefits such as child-care benefits or child-raising allowances on the other hand. Although the new wording of the Regulation has resulted in a harmonisation, this distinction is nevertheless still of considerable importance where the connection in Art. 68 is concerned. Supplementary allowances to pensions, for example, are connected to the Member State competent for the pension, while the State of employment is the connecting factor for employed persons, self-employed persons, students and the like. 6 Please refer to Case C-225/10 (Garcia et al.), EU:C:2011:678, for the term family allowances pursuant to Art. 77 and 78 Reg. No. 1408/71. 7 Please refer to Case C-543/03 (Dodl and Oberhollenzer), EU:C:2005:364, Case C-177/12 (Lachheb), EU:C:2013:689, and joined Cases C-216/12 and 5

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C-217/12 (Hliddal and Bornand), EU:C:2013:568, for the term family benefits pursuant to Art. 1 Reg. No. 1408/71. Furthermore, please also refer among others to the Supreme Court 25.6.2013, 8 10 Ob 60/12 i, and the Supreme Court 22.10.2013, 10 Ob 19/13 m, for the question as to whether according to Austrian legislation advance payments of maintenance fall under the scope of Reg. No. 883/2004. 2. Regulatory effect

The provision comprises three key rules: firstly the equal status of pensioners 9 with other persons, secondly the opening up in the direction of family benefits and lastly the retention of the country of employment principle (see also Fuchs, Was bringt die neue VO (EG) Nr. 883/2004?, SGb 2008, p. 201, 209). Compared to Art. 72, Art. 67 is easier to read, although while reading particular attention must be given to the competent Member State from the very outset. A person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his/her family members residing in another Member State, as if they were residing in the former Member State. This accords with Art. 73 Reg. No.1408/71.

Article 68 Priority rules in the event of overlapping (1) Where, during the same period and for the same family members, benefits are provided for under the legislation of more than one Member State the following priority rules shall apply: a) in the case of benefits payable by more than one Member State on different bases, the order of priority shall be as follows: firstly, rights available on the basis of an activity as an employed or self-employed person, secondly, rights available on the basis of receipt of a pension and finally, rights obtained on the basis of residence; b) in the case of benefits payable by more than one Member State on the same basis, the order of priority shall be established by referring to the following subsidiary criteria: i) in the case of rights available on the basis of an activity as an employed or selfemployed person: the place of residence of the children, provided that there is such activity, and additionally, where appropriate, the highest amount of the benefits provided for by the conflicting legislations. In the latter case, the cost of benefits shall be shared in accordance with criteria laid down in the Implementing Regulation; ii) in the case of rights available on the basis of receipt of pensions: the place of residence of the children, provided that a pension is payable under its legislation, and additionally, where appropriate, the longest period of insurance or residence under the conflicting legislations; iii) in the case of rights available on the basis of residence: the place of residence of the children. (2) In the case of overlapping entitlements, family benefits shall be provided in accordance with the legislation designated as having priority in accordance with paragraph 1.

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Part 2: Regulation (EC) No 883/2004 Entitlements to family benefits by virtue of other conflicting legislation or legislations shall be suspended up to the amount provided for by the first legislation and a differential supplement shall be provided, if necessary, for the sum which exceeds this amount. However, such a differential supplement does not need to be provided for children residing in another Member State when entitlement to the benefit in question is based on residence only. (3) If, under Article 67, an application for family benefits is submitted to the competent institution of a Member State whose legislation is applicable, but not by priority right in accordance with paragraphs 1 and 2 of this Article: a) that institution shall forward the application without delay to the competent institution of the Member State whose legislation is applicable by priority, inform the person concerned and, without prejudice to the provisions of the Implementing Regulation concerning the provisional award of benefits, provide, if necessary, the differential supplement mentioned in paragraph 2; b) the competent institution of the Member State whose legislation is applicable by priority shall deal with this application as though it were submitted directly to itself, and the date on which such an application was submitted to the first institution shall be considered as the date of its claim to the institution with priority. Article 58 Reg. No. 987/2009 Priority rules in the event of overlapping For the purposes of applying Article 68 (1)(b)(i) and (ii) of the basic Regulation, where the order of priority cannot be established on the basis of the children’s place of residence, each Member State concerned shall calculate the amount of benefits including the children not resident within its own territory. In the event of applying Article 68 (1)(b)(i), the competent institution of the Member State whose legislation provides for the highest level of benefits shall pay the full amount of such benefits and be reimbursed half this sum by the competent institution of the other Member State up to the limit of the amount provided for in the legislation of the latter Member State. Article 59 Reg. No. 987/2009 Rules applicable where the applicable legislation and/or the competence to grant family benefits changes (1) Where the applicable legislation and/or the competence to grant family benefits change between Member States during a calendar month, irrespective of the payment dates of family benefits under the legislation of those Member States, the institution which has paid the family benefits by virtue of the legislation under which the benefits have been granted at the beginning of that month shall continue to do so until the end of the month in progress. (2) It shall inform the institution of the other Member State or Member States concerned of the date on which it ceases to pay the family benefits in question. Payment of benefits from the other Member State or Member States concerned shall take effect from that date. Article 60 Reg. No. 987/2009 Procedure for applying Articles 67 and 68 of the basic Regulation (1) The application for family benefits shall be addressed to the competent institution. For the purposes of applying Articles 67 and 68 of the basic Regulation, the situation of the whole family shall be taken into account as if all the persons involved were subject to the legislation of the Member State concerned and residing there, in particular as regards a person’s entitlement to claim such benefits. Where a person entitled to claim the benefits does not exercise his right, an application for family benefits submitted by the other parent, a person treated as a parent, or a person or institution acting as guardian of the child or children, shall be taken into account by the competent institution of the Member State whose legislation is applicable. (2) The institution to which an application is made in accordance with paragraph 1 shall examine the application on the basis of the detailed information supplied by the applicant, taking into account the overall factual and legal situation of the applicant’s family. If that institution concludes that its legislation is applicable by priority right in accordance with Article 68(1) and (2) of the basic Regulation, it shall provide the family benefits according to the legislation it applies. If it appears to that institution that there may be an entitlement to a differential supplement by virtue of the legislation of another Member State in accordance with Article 68(2) of the basic Regulation, that institution shall forward the application, without delay, to the competent institution of the other Member State and inform the person concerned; moreover, it shall inform the institution of the other Member State of its decision on the application and the amount of family benefits paid. (3) Where the institution to which the application was made concludes that its legislation is applicable, but not by priority right in accordance with Article 68(1) and (2) of the basic Regulation, it shall take a provisional decision, without delay, on the priority rules to be applied and shall forward the application, in accor-

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Article 68 dance with Article 68(3) of the basic Regulation, to the institution of the other Member State, and shall also inform the applicant thereof. That institution shall take a position on the provisional decision within two months. If the institution to which the application was forwarded does not take a position within two months of the receipt of the application, the provisional decision referred to above shall apply and this institution shall pay the benefits provided for under its legislation and inform the institution to which the application was made of the amount of benefits paid. (4) Where there is a difference of views between the institutions concerned about which legislation is applicable by priority right, Article 6(2) to (5) of the implementing Regulation shall apply. For this purpose the institution of the place of residence referred to in Article 6(2) of the implementing Regulation shall be the institution of the child’s or children’s place of residence. (5) If the institution which has supplied benefits on a provisional basis has paid more than the amount for which it is ultimately responsible, it may claim reimbursement of the excess from the institution with primary responsibility in accordance with the procedure laid down in Article 73 of the implementing Regulation.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Designation of the Member State having priority (para. 1). . . . . . . . . . 2. Designation of the amount of the benefit (para. 2) . . . . . . . . . . . . . . . . . . . 3. Procedure for the application of benefits (para. 3) . . . . . . . . . . . . . . . . . . . 4. Procedure and changes in the legislation and/or the competence to grant family benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 5 5 8 9 10

I. Spirit and Purpose

In relation to its preceding regulations, Art. 76 and 77 Reg. No. 1408/71, 1 Art. 68 Reg. No. 883/2004 has been entirely reworded. The reason for this reform lies, among other things, in the fact that the legislative distinction between family benefits and family allowances has been abandoned. As a whole, the rules on priority were previously distributed among different provisions of Reg. No. 1408/71. Art. 72 a was applicable to persons who have become fully unemployed and Art. 73 to employed persons and self-employed persons. Art. 75 laid down different competences for family benefits granted to employed persons or self-employed persons on the one hand and unemployed persons on the other. The rules of priority were found in Art. 76, while Art. 77 regulated the competence for benefits for the dependent children of pensioners. Art. 78, 78 a and 79 or rather 79 a on the other hand dealt with the pensions of orphans. All these provisions are now subsumed in Art. 68, which includes rules of priority for overlapping entitlements. Whereby Art. 68 is concerned with three matters. Para. 1 deals with the prior- 2 ity of benefits. A distinction is made here between the provision of benefits by more than one Member State on different or on the same bases. The provision of benefits on different bases focuses on the respectively different criteria for the basis of entitlement in compliance with national law. Whereby there are three bases that are connected by national law to the right, namely activity as an employed or self-employed person, receipt of a pension and residency (para. 1(a)). In the case benefits are provided on the same bases, a differentiation is first 3 made in accordance with the above-mentioned bases for benefits; then priorities are established based on further criteria (para. 1(b)). Para. 2 deals with the suspension of entitlement and differentiation supplements. Entitlements to family Franz Marhold

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benefits shall be suspended by the competent institution or Member State whose legislation is applicable, but not by priority right, up to the amount provided for by the legislation applicable by priority right and a differential supplement shall be provided, if necessary, for the sum that exceeds this amount. However, such a differential supplement does not need to be provided for children residing in another Member State when entitlement to the benefit in question is based on residence only. Para. 3 obliges the institution, in the event of a conflict of legislation, to forward the application to the competent institution of the Member State without delay (please refer to II for a more detailed account). 4 Still under Reg. No. 1408/71, the CJEU was called upon to deal with problems of priority in the case of the accumulation of entitlements to family benefits in the following judgements: in the Case C-352/06 (Bosmann), EU:C: 2008:290, and in the joined Cases C-611/10 and C-612/10 (Hudzinski, Wawrzyniak), EU:C:2012:339, the Court indicated that the regulations of Reg. No. 1408/71 were to be interpreted in the light of the purpose of Art. 48 TFEU, which is to contribute to the establishment of the greatest possible freedom of movement of employed persons. The question concerned in Case C-352/06 (Bosmann) was the entitlement to child benefits for children of a Belgian national bringing up the children on her own and who was employed in the Netherlands but all resident in Germany. Dutch legislation was applicable in this case, which contrary to German legislation did not provide for benefits for children above the age of 18. The court stated that Art. 13 (2)(a) of the Reg. No. 1408/71 does not prevent a migrant worker subject to the social security system of the Member State of employment from receiving family benefits under the national legislation of the Member State of residency in the latter State. The question in the joined Cases C-611/10 and C-612/10 (Hudzinski, Wawrzyniak) concerned persons resident and socially insured in Poland who were actively employed as seasonal workers or posted workers in Germany and who received child benefits in Poland for their children living in Poland. In the view of the CJEU Art. 14 (1) (a) and Art. 14 a (1)(a) Reg. No. 1408/71 are to be interpreted in such a way that they do not preclude a Member State, which is not designated under those provisions as the competent Member State, from granting child benefits in accordance with its national law to a migrant worker engaged in carrying out temporary work within its territory in circumstances such as those at issue in the main proceedings, including in the case where it is found, first, that the worker concerned has not suffered any legal disadvantage by reason of the fact that he has exercised his right to freedom of movement since he remains entitled to family benefits of the same kind in the competent Member State and, second, that neither that worker nor the child for whom that benefit is claimed habitually reside within the territory of the Member State in which the temporary work was carried out. In addition the CJEU ruled that the provisions of the TFEU must be interpreted as precluding the application of a rule of national law, such as that resulting from § 65 of the German EStG, in so far as it involves, not a reduction

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in the amount of the benefit corresponding to the amount of a comparable benefit received in another State, but exclusion from that benefit. The necessity of clarifying the rules of priority was once again established in the Case C-16/09 (Schwemmer), EU:C:2010:605. The Case C-225/10 (Garcia et al.) dealt with the analogue application of previous rules of priority in Art. 76 Reg. No. 1408/71 to benefits for pensioners for dependent children. This was not accepted by the CJEU (para. 48 et seq. of the judgement). In the most recent judgement Case C-347/12 (Wiering), EU:C:2014:300, the referring court was in doubt as to whether only family benefits of the same kind or all family benefits received by a migrant worker are to be taken into account when calculating the supplementary allowance. The CJEU concluded that Art. 1(u)(i) and Art. 4(1)(h) Reg. No. 1408/71 and Art. 10(1)(b)(i) Reg. No. 574/72 are to be interpreted in the present situation in such a way that when calculating any supplementary allowances to which a migrant worker may be entitled in his/her Member State of employment not all benefits paid to the family subject to the legislation of the Member State of residence must be taken into account but then again family benefits of the same kind. Most especially as pursuant to Art. 12 Reg. No. 1408/71 a family benefit such as ‘Elterngeld’, provided for by German legislation, is not a benefit of the same kind as ‘Kindergeld’ provided for by that legislation, or family allowances such as those provided for by Luxembourg legislation. II. Commentary 1. Designation of the Member State having priority (para. 1)

The regulation of para. 1 makes a basic distinction between family benefits 5 payable on different bases and those payable on the same bases. An example of granting of a benefit on different bases is the case of a father who has the right to family benefits based on his activity as an employed person in a foreign country, while the mother also has the same entitlement in the home country for the same children based on the place of residence of the children residing with her in the home country. If and when the family benefit is based on an activity as an employed or a self-employed person, such benefit takes priority over one based on the receipt of a pension or based on residence. On the other hand, payment of a benefit based on the receipt of a pension takes priority over benefits based on residence. In the aforementioned case, the Member State in which the father performs his activity of employment is therefore designated as having priority where family benefits are concerned. The family benefits of the Member State of residence have lesser priority, a point in which the new legal position is different from the old one. While the person considered by the legislation of the country of residence to have priority was entitled to receive the family benefits under Reg. No. 1408/71, priority for entitlements is now based on the activity as an employed or self-employed person.

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In the case of benefits from more than one Member State payable on the same bases, e.g. each based on employment, Art. 68(1)(b) provides for different subsidiary criteria or rules of priority. In those cases where payment of the benefits is based on multiple employment, the state in which the children reside is given priority for the benefits. However, this requires that the children reside in one of the Member States of employment that come into question. Otherwise priority is given to the Member State that provides the highest amount of benefits. In cases where the entitlement to benefits is based on the receipt of a pension, the Member State in which the children reside is given priority. If this involves a third Member State in which no pension is received, priority is based on the longest period of insurance and residence under the relevant pension insurance institution. 7 Based on the CJEU judgement in the Case C-543/03 (Dodl and Oberhollenzer), EU:C:2005:364, the Administrative Commission specified in its decision No. F1 dated 12.06.2009 (cf. Annex) that activity as an employed or self-employed person gives rise to an entitlement to family benefits even if the activity is temporarily interrupted due to specific circumstances. These include interruptions due to illness, maternity leave, industrial accidents, occupational illnesses or unemployment, insofar wages or social benefits – with the exception of pensions – are paid due to these risks. Periods of unpaid leave and periods of strike or lock-outs are also included. And finally this also applies to periods of unpaid leave for raising children as long as this leave is given equal treatment to an activity as an employed or self-employed person under the relevant legislation. 6

2. Designation of the amount of the benefit (para. 2) 8

Art. 68 (1) Reg. No. 883/2004 designates the Member State or institution that is competent for the payment of the benefits, but does not mention any release from their obligations to pay benefits of the institutions whose legislations are competent, but not by priority right. Para. 2, however, provides only for the provision of family benefits under the legislation designated as having priority and goes on to stipulate that the benefits of lesser priority shall be suspended up to the amount of those provided for under the legislation designated as having priority. A right to the provision of a differential supplement is provided for only in as far as the family benefit provided in the Member State whose legislation is applicable, but not by priority right, is higher (para. 2 s. 2 half sentence 2). This differential supplement is calculated on the basis of the difference between the amount of the benefits from the primarily competent Member State and the higher amount of the family benefits from the competent Member State whose legislation applies, but not by priority right. In the event the competent Member State by right of priority is of the opinion that such a differential supplement is due, the person concerned must be informed and an appropriate application must be forwarded to the institution of the competent Member State without delay. Moreover, the Member State competent by priority right shall inform the institu412

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tion of the other Member State of its decision on the application and the amount of family benefits paid (Art. 60(2)(subsection 3) Reg. No. 987/2009) (cf. BeckOK SozR/Utz VO (EG) 883/2004 Art. 68 (3)). There is, however, an exception to the rule on the differential supplement in as far as this does not need to be provided for children residing in another Member State when entitlement to the benefit in question is based on residence only (para. 2 s. 3). Please refer to Case C-250/13 (Wagener), EU:C:2014:278, for the question of the conversion of Swiss family allowances into Euros on the date to be taken into account pursuant to Reg. No. 574/72. 3. Procedure for the application of benefits (para. 3)

This regulation stipulates in accordance with the principle of Europe-wide 9 submission of applications that an application submitted to one of the institutions in question must be forwarded by this institution to the competent Member State whose legislation is applicable by priority. If the application is submitted to an institution of the Member State whose legislation is applicable, but not by priority right, then this institution shall pay the differential supplement (Art. 68(3)(a)). The competent institution of the Member State whose legislation is applicable by priority shall deal with this application as though it were submitted directly to itself, so that the date on the submission of the application to the first institution shall be considered the valid date. Any differences of opinion between the institutions with regard to the priority right of the competent Member State are to be resolved in accordance with the procedures provided for in Art. 6(3-5) Reg. No. 987/2009, whereby this may, under certain circumstances, require referral to the Administrative Commission. Dispositions due to omission or retraction of the application at a competent institution of the Member State whose jurisdiction is applicable, but not by priority right have at all events become immaterial due to the principle of the Europe-wide relevance of the submission of an application. Ultimately, each and any submission of an application is addressed to all institutions of the Member States that come into question. 4. Procedure and changes in the legislation and/or the competence to grant family benefits

The rules applicable for the procedure of granting family benefits are laid 10 down in Art 60 of Reg. No. 987/2009. Reg. No. 987/2009 also includes rules to be applied in the event of changes in 11 legislation and/or competence to grant family benefits (Art. 59 Reg. No. 987/2009).

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Article 68 a Provision of benefits In the event that family benefits are not used by the person to whom they should be provided for the maintenance of the members of the family, the competent institution shall discharge its legal obligations by providing the said benefits to the natural or legal person in fact maintaining the members of the family, at the request and through the agency of the institution in their Member State of residence or of the designated institution or body appointed for that purpose by the competent authority of their Member State of residence. 1

Art. 68 a, which was introduced by Art. 1 (18) Reg. No. 988/2009, corresponds to the regulation in the old Art. 75(2) Reg. No. 1408/71. This regulation aims at ensuring that the persons entitled to the benefits do in fact use the family benefits for the purpose for which they were intended. To this end a regulation is provided for that shall be applied in the event the person entitled to the benefit does not use the family benefit to which he/she is entitled for the maintenance of the members of the family. In such cases, payment of the family benefits is to be made to the person in fact maintaining the members of the family. The dependent members of the family have the right to submit such an application. Moreover, an application can also be submitted by the institutional agencies that provide benefits for securing livelihood, in as far as it is permissible under national legislation for such funding agencies to determine social benefits.

Article 69 Additional provisions (1) If, under the legislation designated by virtue of Articles 67 and 68, no right is acquired to the payment of additional or special family benefits for orphans, such benefits shall be paid by default, and in addition to the other family benefits acquired in accordance with the above-mentioned legislation, under the legislation of the Member State to which the deceased worker was subject for the longest period of time, in so far as the right was acquired under that legislation. If no right was acquired under that legislation, the conditions for the acquisition of such right under the legislations of the other Member States shall be examined and benefits provided in decreasing order of the length of periods of insurance or residence completed under the legislation of those Member States. (2) Benefits paid in the form of pensions or supplements to pensions shall be provided and calculated in accordance with Chapter 5. Article 61 Reg. No. 987/2009 Procedure for applying Article 69 of the basic Regulation For the purposes of applying Article 69 of the basic Regulation, the Administrative Commission shall draw up a list of the additional or special family benefits for orphans covered by that Article. If there is no provision for the institution competent to grant, by priority right, such additional or special family benefits for orphans under the legislation it applies, it shall without delay forward any application for family benefits, together with all relevant documents and information, to the institution of the Member State to whose legislation the person concerned has been subject, for the longest period of time and which provides such additional or special family benefits for orphans. In some cases, this may mean referring back, under the same conditions, to the institution of the Member State under whose legislation the person concerned has completed the shortest of his or her insurance or residence periods.

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Art. 69 includes regulations to be applied to family benefits for orphans (para. 1 1) and to benefits in the form of pensions or supplements to pensions (para. 2). Art. 1 stipulates that the regulations provided for in Art. 67 and 68 shall also be applied to orphans. The calculation and provision of pensions and supplements to pensions shall be not effected in accordance with Chapter 8, but in accordance with Chapter 5 (Old-age and survivors’ pensions). In order to prevent disadvantages for persons who have spent their professional lives in States that do not provide for pensions for orphans but only special supplements or benefits for orphans, Art. 69 stipulates that these States shall be obliged to provide these special supplements or benefits for orphans in addition to the family benefits of the other Member States. The Administrative Commission shall draw up a list of these additional or special family benefits (Art. 61 Reg. No. 987/2009).

Chapter 9 Special non-contributory cash benefits

Article 70 General provision (1) This Article shall apply to special non-contributory cash benefits which are provided under legislation which, because of its personal scope, objectives and/or conditions for entitlement, has characteristics both of the social security legislation referred to in Article 3(1) and of social assistance. (2) For the purposes of this Chapter, "special non-contributory cash benefits" means those which: (a) are intended to provide either: (i) supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in Article 3(1), and which guarantee the persons concerned a minimum subsistence income having regard to the economic and social situation in the Member State concerned; or (ii) solely specific protection for the disabled, closely linked to the said person's social environment in the Member State concerned, and (b) where the financing exclusively derives from compulsory taxation intended to cover general public expenditure and the conditions for providing and for calculating the benefits are not dependent on any contribution in respect of the beneficiary. However, benefits provided to supplement a contributory benefit shall not be considered to be contributory benefits for this reason alone, and (c) are listed in Annex X. (3) Article 7 and the other Chapters of this Title shall not apply to the benefits referred to in paragraph 2 of this Article. (4) The benefits referred to in paragraph 2 shall be provided exclusively in the Member State in which the persons concerned reside, in accordance with its legislation. Such benefits shall be provided by and at the expense of the institution of the place of residence.

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Part 2: Regulation (EC) No 883/2004 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Historical development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. The hybrid nature of special non-contributory cash benefits (para. 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. The legal definition of special non-contributory cash benefits (para. 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Case law of the CJEU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) The factual elements of para. 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) Special benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . bb) Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cc) Listing in Annex X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Exclusion from the general coordination rules (para. 3) . . . . . . . . . . . . . 4. Exclusion from export – provision of benefits in the Member State of residence (para. 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Compatibility with Art. 48 TFEU. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Provision of benefits in the Member State of residence . . . . . . . . . .

1 1 4 8 8 9 9 11 11 14 15 17 18 18 19

I. Spirit and Purpose 1. Historical development

From the very outset coordination law made a strict distinction between social security benefits and social assistance benefits. Only the first were to fall within the scope of the coordination, but not the latter. In view of the continuous expansion of national social benefits schemes and their increasingly greater differentiation it became more and more difficult to classify benefits as to belonging to one or other of the two types (social security, social assistance). This confronted the CJEU in particular with difficult questions of delimitation and led very early on to the Court proclaiming in a judgement delivered under Reg. (EEC) No. 3 (CJEU, Case 1/72 (Frilli), EU:C:1972:56): “Although it may seem desirable from the point of view of applying the regulation, to establish a clear distinction between legislative schemes which come within social security and those which come within social assistance, it is possible that certain laws, because of the classes of persons to which they apply, their objectives and the detailed rules for their application, may simultaneously contain elements belonging to both categories mentioned and thus defy any general classification.” The term hybrid benefits was coined in this connection (cf. Pennings, Introduction to European Social Security Law, 5th ed. 2010, p. 57 et seq.) The CJEU developed a prolific set of case law in which it attempted to find a solution to the problem (see para. 8 et seq. below). 2 European legislature responded to the problems that had arisen by passing amending Reg. No. 1247/92 of the Council from 30.4.1992 (OJ No. L 136). The recitals of the Reg. took account of the case law of the CJEU and stressed with regard to these benefits that they have some features akin to social assistance in that need is an essential criterion in their implementation and the conditions of entitlement are not based upon the aggregation of periods of employment or 1

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contributions, whilst in other features they are close to social security to the extent that there is an absence of discretion in the manner in which such benefits as are provided thereunder are awarded and in that it confers a legally defined position upon beneficiaries. In particular due the insistence of the Member States, the legislature even went one step further. It laid down an exemption from the export obligation in Art. 10 a (1) Reg. No. 1408/71. The benefits should be granted solely in the Member State of residence, if these had been listed in (former) Annex II a. The resulting provision constituted a compromise between the need to incorporate more benefits in the coordination that clearly featured elements of assistance and the interests of the Member States in only having to grant these benefits on their own territory as these were frequently the expression of socio-political responsibility vis-à-vis their own nationals. Further specification of the factual elements of the benefit profile was 3 achieved with Reg. No. 647/2005 (OJ L 117/1), which was prompted in particular by the decisions of the CJEU in the Cases C-43/99 (Leclere), EU:C:2001:303 and Case C-215/99 (Jauch), EU:C:2001:139. Today’s legal definition in Art. 70 (2) is identical with that of Art. 1 (2) Reg. No. 647/2005. For the rest Art. 70 adheres entirely to current legislation, in particular the guiding principles developed in CJEU case law (key decisions of the CJEU include: CJEU, Case C-78/91 (Hughes), EU:C:1992:331; Case C-66/92 (Acciardi), EU:C: 1993:341;Case C-356/89 (Newton), EU:C:1991:265; Case C-20/96 (Snares), EU:C:1997:518; Case C-297/96 (Partridge), EU:C:1998:280; Case C-90/97 (Swaddling), EU:C:1999:96; Case C-160/02 (Skalka), EU:C:2004:269; see also Verschueren, Leistungen bei Invalidität und Altersrenten sowie beitragsunabhängige Leistungen, in: Eichenhofer (ed.), 50 Jahre nach ihrem Beginn – Neue Regeln für die Koordinierung sozialer Sicherheit, 2009, 223, 244 ff.). 2. Principles

Para. 1 states that the subject matter of the provision concerns special non- 4 contributory cash benefits, i.e. benefits characterised by their hybrid nature. They feature elements of both social security within the meaning of Art. 3 (1) and elements of benefits within the meaning of Art. 3 (5). The Court (CJEU, Case C-140/12 (Brey), EU:C:2013:565 para. 39) regards 5 Art. 70 (4) as a conflict-of-laws rule with which the competent institution for special non-contributory cash benefits is to be determined. However, it is up to the Member States to determine the substantive conditions for such an entitlement. In the Brey judgment the CJEU held that special non-contributory benefits can satisfy the requirements which constitute social assistance benefits in the sense of the provisons contained in Dir. 2004/38. This opinion was confirmed in the Dano judgment concerning a subsistence benefit under German law (CJEU, C-333/13, EU:C:2014:2358). Such benefits are provided exclusively in the Member State, in which the persons concerned reside, in accordance with its legislation. As a consequence, there is nothing to prevent the grant of such beneMaximilian Fuchs

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fits to Union citizens who are not economically active from being made subject to the requirement that those citizens fulfil the conditions for obtaining a right of residence under Dir. 2004/38 of the host Member State (para. 83 of the Dano judgment). 6 The legal definition of special non-contributory cash benefits in para. 2 includes a summary of all criteria developed by the CJEU for this type of benefit. Decisive for the first type (a)(i) is that such benefits must relate to the risks referred to in Art. 3 (1), for which they provide supplementary, substitute or ancillary cover. The content of the benefit is the guarantee of a minimum subsistence income. It is also decisive that such guarantee must have regard to the economic and social situation of the Member State concerned, as the expression of the national responsibility upon which these benefits are based. For this reason the same criterion is required for the second type (a)(ii), which concerns benefits provided solely for the specific protection of the disabled. 7 As can be deduced from para. 2 (b) constitutive characteristics of special noncontributory cash benefits include their financing deriving from compulsory taxation and their non-contributory nature. In addition the qualification of these benefits also depends upon their entry in Annex X (para. 2 (c)). This entry is therefore given constitutive importance. II. Commentary 1. The hybrid nature of special non-contributory cash benefits (para. 1) 8

Art. 1 expresses the reason for the provision, namely the existence of benefits, which because of their personal scope, objectives and/or conditions for entitlement feature characteristics of both the provisions for social security mentioned in Art. 3 and social assistance (Art. 3 (5)). Reference is being made here to the history of the origins of this coordination rule, which is mainly attributable to the case law of the CJEU. Their “hybrid nature” is essential for this type of benefit. The legal consequences intended specifically for this type of benefit can only arise if this condition is fulfilled. Application of Art. 70 is excluded, however, if a benefit can be classified as a social security within the meaning of Art. 1 (see Art. 3 para. 7 for questions of distinction). A benefit cannot be classified as a benefit of social security and at the same time as a non-contributory cash benefit (CJEU, Case C-286/03 (Hosse), EU:C:2006:125 para. 36 et seq.; Case C-299/05 (Commission ./. EP/Council), EU:C:2007:608 para. 51). The same applies with regard to Art. 3 (5). Benefits that fall within the scope of this provision are completely excluded from coordination so that Art. 70 cannot be applied to them (see Art. 3 para. 33 et seq. for these benefits).

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2. The legal definition of special non-contributory cash benefits (para. 2) a) Case law of the CJEU

The substantive framework of para. 2 can only be comprehended in the light 9 of the case law of the CJEU. This, of course, makes sense because – as indicated above (para. 2 et seq.) - Reg. No. 647/2005 and para. 2, with which it corresponds, undertook to codify this case law. In its judgement in the Case Skalka delivered in the year 2004 the CJEU summarised the principles and criteria in virtually textbook fashion as well as pointing out the intentions behind its case law (CJEU, Case 160/02 (Skalka), EU:C:2004:269 para. 19 et seq. concerning a compensatory supplement intended to augment a retirement pension, confirmed by CJEU, C-140/12 (Brey), EU:C:2013:565). The CJEU stresses that the benefit at issue must have the character of a special benefit. It must relate to one of the risks listed in Art. 3 (1) (the CJEU had already decided this in the Case 249/83 (Hoeckx), EU:C:1985:139 and Case 66/92 (Acciardi), EU:C.1993:341). It must be assigned to social security in that it benefits as of right persons who fulfil the conditions for the grant of the social security benefit to which it is linked, and on the other hand to social assistance, in the sense that it is not dependent on periods of work or contributions and that it is intended to relieve a clear need. The purpose of such benefits is to ensure the provision of an income supplement to those persons receiving insufficient social security benefits by guaranteeing a minimum means of subsistence to those persons whose total income falls below a statutory threshold. Furthermore, the CJEU stresses that a special benefit is defined by its purpose (CJEU, Case C-154/05 (Kersbergen-Lap), EU:C:2006:449 para. 30; Case C-537/09 (Bartlett), EU:C:2011:278 para. 26). It must either replace or supplement a social security benefit and be by its nature social assistance justified on economic and social grounds and fixed by legislation setting objective criteria. The non-contributory nature is decisive in addition to these elements, which 10 define the characteristics of the special benefit. The crucial criterion is the actual financing of the benefit. The Court verifies whether this financing comes indirectly or directly from social contributions or from public funding (cf. also in this respect the famous Case of Austrian care allowance in the Case C-215/99 (Jauch), EU:C:2001:139 para. 30 et seq.). b) The factual elements of para. 2 aa) Special benefit

Completely in line with the spirit of the aforementioned case law of the 11 CJEU, para. 2 (a)(i) provides that special non-contributory cash benefits are such that are intended to provide supplementary, substitute or ancillary cover against the risks of social security mentioned in Art. 3 and that guarantee the persons concerned a minimum subsistence income having regard to the econo-

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mic and social situation in the Member State concerned. The element of minimum subsistence income first appears in the Case Newton (CJEU, Case C-356/89, EU:C:1991:265 para. 14). Having regard to the economic and social situation of the Member State concerned, reflects the wording in the judgment in the Case Skalka, where it stands that special benefits must always be closely linked to the socio-economic situation of the country concerned and its amount, fixed by law, takes account of the standard of living in that country. In accordance with Art. 4 (2) (b) Reg. No. 1408/71, non-contributory benefits were excluded from the scope of the Reg. if their scope was confined to part of the territory of a Member State. This provision was not adopted in Reg. No. 883/2004. 12 Supplementary or ancillary protection against the risks within the meaning of Art. 3 (1) mean benefits that are granted in addition to a standard benefit in compliance with Art. 3 (1) and that cover the same risk (e.g. topping up of a person’s income to guarantee a minimum pension for pensioners whose income is below the statutory minimum threshold despite their being entitled to a standard oldage pension). These could also encompass benefits that are granted together with a standard benefit in compliance with Art. 3 (1), but in fact cover a different risk (e.g. supplements to a pension granted on the grounds of a physical or mental infirmity, (cf. in this respect the Decision of the Administrative Commission from 29.6.2000, OJ C 44/13). Substitute benefits are those benefits granted instead of the standard benefits in the insurance cases listed under Art. 3 (1). These must, therefore, cover the exact identical insurance case. Typically they involve benefits provided for persons who, e.g., do not satisfy the legal conditions for receipt of standard benefits (according to the aforementioned Decision in No. 6). 13 A second possibility for a benefit to be deemed a special non-contributory cash benefit in compliance with para. 2 (a)(ii) is if its purpose is solely that of specific protection for the disabled, closely linked to the social environment of those persons in the Member State concerned. As the decision of the CJEU concerning, Finnish and Swedish benefits and disability living allowance in the United Kingdom shows, the Court interpreted the criteria very strictly (CJEU, Case C-299/05 (Commission ./. EP/Council), EU:C:2007:608 para. 52 et seq.). It was required that the purpose of the benefit concerned is “solely” that of specific protection for the disabled, closely linked to the social environment of those persons in the Member State concerned. Not only do the benefits submitted to the Court for verification not solely satisfy this purpose, they are also intended to ensure the necessary care and the supervision of those persons, where it is essential, in their family or a specialised institution (para. 54 of the judgement). Furthermore, non-contributory cash benefits are defined by their purpose. They must either replace or supplement a social security benefit, while being distinguishable from it, and be by their nature social assistance justified economic and social grounds and fixed by legislation setting objective criteria (see para. 55 of the judgement related to CJEU, Case C-154/05 (Kersbergen-Lap and DamsSchipper), EU:C:2006:449 para. 30). The benefits at issue did not satisfy these

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criteria. Because they are granted for benefits – as is typical for social security benefits – without any individual and discretionary assessment of personal needs, to recipients on the basis of a statutorily defined position and relate to the risk of sickness. In its grounds for this classification the Court referred, in particular, to the judgements in the Case Molenaar and Jauch (cf. para. 56 of the judgement). However, the Court indicated that where the British disability living allowance was concerned the mobility components were severable and in later proceedings in fact affirmed this benefit as being a special non-contributory benefit (Case C-537/09 (Bartlett), EU:C:2001:278 para. 27 et seq.). bb) Financing

Characteristic of the special non-contributory cash benefits is that they are fi- 14 nanced exclusively through compulsory taxations intended to cover general public expenditure. The conditions for providing and calculating the benefit must not be dependent on any contribution in respect of the beneficiary (para. 2 (b)). However, s. 2 clearly states that benefits provided to supplement a contributory benefit shall not be considered to be contributory benefits for this reason alone. cc) Listing in Annex X

As was the case in the predecessor provision in Art. 4 (2 a) Reg. No. 1408/71, 15 para. 2 (c) also requires that the Member State concerned lists the benefit in Annex X. This entry is necessary in order for the special coordination rules to apply for special non-contributory cash benefits (in particular the legal consequences of para. 3 and 4). For example see CJEU, Case C-140/12 (Brey), EU:C: 2013:565; Case C-333/13 (Dano), EU:C:2014:2358. The following must also be noted: if a benefit is listed, it must be regarded as being exclusively governed by the coordination rules and consequently, as being a special non-contributory benefit (cf. in this respect CJEU, Case C-20/96 (Snares), EU:C:1997:580 para. 32). However, entry in Annex X does not preclude an analysis as to whether a 16 benefit classifies as a social security benefit within the meaning of Art. 3 (1) and therefore also unrestricted application of the coordination rules. The CJEU ruled in this sense in the Case Jauch (cf. CJEU, Case C-215/99 (Jauch), EU:C: 2001:139 para. 16 et seq.; see also Case C-43/99 (Leclere), EU:C:2001:303; Case C-299/05 (Commission ./. EP/Council), EU:C:2007:608). 3. Exclusion from the general coordination rules (para. 3)

Special coordination rules apply for special non-contributory cash benefits. 17 For this reason para. 3 declares the key provision for other benefits in Art. 7, concerning the waiving of residence rules, which ensure the export of benefits, as not applicable. Neither are any of the other chapters of Title III applicable.

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4. Exclusion from export – provision of benefits in the Member State of residence (para. 4) a) Compatibility with Art. 48 TFEU 18

The transfer of benefits to other European Member States (export) is a key concern of coordination law. For this reason it is embodied in Art. 48 (b) TFEU. However, para. 4 puts this principle aside. This raises the question as to whether this provision is in tune with Art. 48 TFEU. The CJEU has answered this question in its settled case law (fundamentally CJEU, Case C-20/96 (Snares), EU:C:1997:518 para. 39 et seq.; confirmed by Case C-43/99 (Leclere), EU:C: 2001:303 para. 32; Case C-215/99 (Jauch), EU:C:2001:139 para. 21). The court points out in its settled case law that the principle of the exportability of social security benefits applies so long as derogating provisions have not been adopted by Community legislature. The Court also stresses that the grant of benefits closely linked with the social environment may be made subject to a condition of residence in the State of the competent institution. Moreover, the purpose of Art. 70 (4) is also to protect the interests of migrant workers in accordance with the provisions of Art. 48 TFEU, as it requires that account must be taken of periods of employment etc. completed in other Member States. b) Provision of benefits in the Member State of residence

Para. 4 (1) determines that special non-contributory cash benefits shall be provided in the Member State of residence in accordance with its legislation. The institution (Art. 1 (p) of the place of residence is competent for such provision (s. 2). Pursuant to Art. 1 (j) place of residence is the place where a person habitually resides. This means where the habitual centre of his/her interests are to be found. Whereby account should be taken in particular of the employed person's family situation, the reasons which have led him to move, the length and continuity of his residence, the fact (where this is the case) that he is in stable employment and his intention as it appears from all the circumstances (CJEU, Case C-90/97 (Swaddling), EU:C:1999:96, para. 29). However, for the purposes of that assessment, the length of residence in the Member State in which payment of the benefit at issue is sought cannot be regarded as an intrinsic element of the concept of place of residence (para. 30 of the judgement). Art. 11 Reg. No. 987/2009 shall be followed in the event of disputes concerning residence. If the legislation of the competent institution makes the right to benefits conditional on the completion of specific periods of insurance, the corresponding periods in another Member must also be taken into account. This earlier obligation embodied in Art. 10 a (2) Reg. No. 1408/71 is now included in the general provision of Art. 6. 20 A recipient’s loss of his/her entitlement to benefits due to his/her moving to another Member State, despite having worker status in the new Member State of residence, does not fundamentally infringe on Art. 45 TFEU or Art. 7 Reg. No. 19

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492/2011 (CJEU, Case C-287/05 (Hendrix), EU:C:2007:494). However, this must not entail an infringement of the rights of a person in a situation such as that at issue, which goes beyond what is required to achieve the legitimate objective pursued by the national legislation (para. 58 of the judgement Hendrix).

Title IV Administrative Commission and Advisory Committee Bibliography: Cornelissen, The Administrative Commission on Social Security for Migrant Workers, Social Europe 1986, p. 40; Falke, Comitology and Other Committees: A Preliminary Empirical Assessment, in: Pedler/Schaefer (eds), Shaping European Law and Policy: The Role of Committees and Comitology in the Political Process, 1996; Maas, La Commission administrative pour la sécurité sociale des travailleurs migrants, une curiosité institutionnelle, CDE 1966, No 4, p. 343; Wenander, A Network of Social Security Bodies - European Administrative Cooperation under Regulation (EC) No 883/2004, Review of European Administrative Law 2013-1, p. 39.

Overview The coordination rules cannot function if there is not a close and effective cooperation between the national authorities and institutions. The main task of the Administrative Commission is to facilitate and to strenghten such cooperation. In addition, it has a number of other tasks, such as deciding the structure, content and format of the documents to be exchanged electronically between social security institutions, and deciding upon the technical specifications of the European Health Insurance Card (EHIC). Provisions laid down in Title IV mandate the Administrative Commission to deal with all administrative questions and questions of interpretation arising from the provisions of the EU regulations. The composition and tasks of the Administrative Commission can only be explained by ist genesis. There are no direct counterparts to the Administrative Commission in other EU policy fields and it does not fit into the ‚comitology‘ committees. The Adminstrative Commission has actually a ‚sui generis‘ character (Wenander, p. 49) Title IV also deals with the other bodies at Union level which play an indispensable role in the daily application of the social security regulations, namely the Technical Commission and the Audit Board. The main task of the Technical Commission is to support the Administrative Commission in its task to improve procedures for exchanging information and to ensure the transmission of data between institutions under a secure framework. A smooth application of the reimbursement system is essential for the functioning of the coordination rules. A Member State having provided benefits in kind to persons on behalf of another Member State must have the guarantee that it is reimbursed within a reasonable

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period of time. It is the role of the Audit Board to assist the Administrative Commission in ensuring that the reimbursement system functions well. Lastly, Title IV deals with the tasks and composition of the Advisory Committee for the coordination of social security systems. The creation of a tripartite Advisory Committee fits perfectly well in the Commission’s task to encourage a social dialogue at European level (Art. 154 TFEU)

Article 71 Composition and working methods of the Administrative Commission (1) The Administrative Commission for the Coordination of Social Security Systems (hereinafter called "the Administrative Commission") attached to the European Commission shall be made up of a government representative from each of the Member States, assisted, where necessary, by expert advisers. A representative of the European Commission shall attend the meetings of the Administrative Commission in an advisory capacity. (2) The Administrative Commission shall act by qualified majority as defined by the Treaties, except when adopting its rules which shall be drawn up by mutual agreement among its members. Decisions on questions of interpretation referred to in Article 72(a) shall be given the necessary publicity. (3) Secretarial services for the Administrative Commission shall be provided by the European Commission.

Article 72 Tasks of the Administrative Commission The Administrative Commission shall: (a) deal with all administrative questions and questions of interpretation arising from the provisions of this Regulation or those of the Implementing Regulation, or from any agreement concluded or arrangement made thereunder, without prejudice to the right of the authorities, institutions and persons concerned to have recourse to the procedures and tribunals provided for by the legislation of the Member States, by this Regulation or by the Treaty; (b) facilitate the uniform application of Community law, especially by promoting exchange of experience and best administrative practices; (c) foster and develop cooperation between Member States and their institutions in social security matters in order, inter alia, to take into account particular questions regarding certain categories of persons; facilitate realisation of actions of crossborder cooperation activities in the area of the coordination of social security systems; (d) encourage as far as possible the use of new technologies in order to facilitate the free movement of persons, in particular by modernising procedures for exchanging information and adapting the information flow between institutions for the purposes of exchange by electronic means, taking account of the development of data processing in each Member State; the Administrative Commission shall adopt the common structural rules for data processing services, in particular on security and

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(e) (f)

(g)

the use of standards, and shall lay down provisions for the operation of the common part of those services; undertake any other function falling within its competence under this Regulation and the Implementing Regulation or any agreement or arrangement concluded thereunder; make any relevant proposals to the European Commission concerning the coordination of social security schemes, with a view to improving and modernising the Community "acquis" by drafting subsequent Regulations or by means of other instruments provided for by the Treaty; establish the factors to be taken into account for drawing up accounts relating to the costs to be borne by the institutions of the Member States under this Regulation and to adopt the annual accounts between those institutions, based on the report of the Audit Board referred to in Article 74. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Nature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Composition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Working methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Clarify administrative questions and questions of interpretation (Art. 72(a)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Promote exchange of experience and best administrative practices (Art. 72 b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Foster and develop cooperation between Member States (Art. 72 c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Encourage the use of new technologies (Art. 72 d)) . . . . . . . . . . . . . . e) Make proposals to the Commission to improve and modernize the Union acquis (Art. 72 f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f) Adopt the annual accounts between institutions of Member states (Art. 72 g)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g) Other tasks (Art. 72 e)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) Structured electronic documents and portable documents . . bb) The European Health Insurance Card (EHIC) . . . . . . . . . . . . . . . cc) Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . dd) Tasks in the framework of the external dimension of EU social security coordination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 3 3 6 8 12 12 16 17 20 23 25 26 27 28 32 34

I. Spirit and Purpose

The Administrative Commission plays an extremely important role in the 1 practical implementation of the social security regulations. The often complex and technical provisions contained in these regulations are to be implemented by the authorities of the Member States. This is only possible if there is a continuous cooperation between the institutions and the competent authorities of the Member States. The raison d’être of the Administrative Commission is to facilitate and strengthen such cooperation. The Administrative Commission takes a rather curious position in Union law. Even when it is not one of the institutions of the Union within the meaning of Art. 13 TEU, various tasks, including regulative ones, have been delegated to this body by the Union legislature. In fact, the tasks of the Administrative Com-

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mission are not only those which are explicitly enumerated in Art. 72. They also comprise those referred to in Art. 72(e) (see below). 2 The very existence of the Administrative Commission can only be explained by its genesis. Art. 69(4) of the 1951 ECSC Treaty required the Contracting Parties to agree to a full set of rules for the coordination of social security for migrant workers in the coal and steel industries. The 1955 Messina Conference redefined the terms of reference: the common market was to include the entire economies of the Member States, not merely the coal and steel industries. This extension made it necessary to place the planned convention in a wider context, without limiting it to the workers in the coal and steel industries. The European Convention on social security for migrant workers was signed in December 1957. The coordination foreseen by Art. 69(4) ECSC was of a traditional, international nature. Therefore, the 1957 European Convention was a traditional international social security convention, to be ratified by all Contracting Parties. Meanwhile the EEC Treaty had been signed in March 1957. Art. 51 EEC required the Community legislature to adopt such measures in the field of social security as were necessary to provide freedom of workers. Contrary to Art. 69(4) ECSC, Art. 51 EEC opened the way for the Council to adopt measures for the coordination of social security by means of Community law. In 1958 it was decided to make the provisions of the European Convention operational as soon as possible by transforming this convention into a regulation under Art. 51 EEC. In this way the time-consuming procedure of having the European Convention ratified could be avoided. In April 1958 the Commission presented its proposal for a regulation incorporating the text of the European Convention in its entirety with only minor changes and omitting the protocols. Within six months the Council gave its approval by adopting Regulation (EEC) No 3 which entered into force on 1 January 1959. The transformation of the European Convention into Reg. No. 3 included the taking over of the Administrative Commission with its traditional international composition. Its members are representatives of the governments of the Member States, receiving instructions from their governments. This was of course completely justified in the framework of the initially foreseen traditional international convention. However, the regulative and interpretative competence of the Administrative Commission is rather problematic in the framework of the TFEU from a constitutional point of view (see below). II. Commentary 1. Nature 3

In spite of its genesis (European Convention converted into Regulation) and its composition (government representatives), the Administrative Commission is not an international body, but a body subject to Union law that is “attached to the European Commission” (Art. 71(1)). In accordance with Art. 1 of its rules (O.J. C 213 of 6 August 2010, p. 20), it is a specialized body of the European 426

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Commission. This expresses the idea that the Administrative Commission not only represents the interests of the Member States, but also has to serve the interest of the Union. Contrary to most other committees, the Administrative Commission can draw 4 up, by mutual agreement, its own rules (Art. 71(2)) without being bound by any model or standard or approval by any Union institution within the meaning of Art. 13 TEU. By virtue of Art. 16 of the rules, where necessary, the interpretation of the provisions of the rules of the Administrative Commission shall be given by the Court of Justice, in accordance with Art. 267 TFEU. Until now the Court has never been approached with a request for such interpretation. In accordance with Art. 2(6) of the rules, the Administrative Commission has at its disposal a Secretary General and a Deputy Secretary General, also reflecting the importance of its role. The Administrative Commission should not be confused with the so-called 5 comitology committees supervising the exercise of implementing powers conferred on the Commission by the Union legislature (Reg. No. 182/2011 of 16 February 2011, O.J. L 55 of 28 February 2011, p.13). Only in one specific case the Administrative Commission has a role to play when the Commission exercises implementing powers. By virtue of Art. 92 IR the annexes of the IR and Annexes VI, VII, VIII and IX of the basic regulation may be amended by Commission regulation. The involvement of the Administrative Commission is limited in making a request to the Commission for such a regulation. 2. Composition

The Administrative Commission is made up of a government representative 6 from each of the Member States, assisted, if need be, by expert advisors. For reasons of efficiency, by virtue of Art. 2(4) of the rules, each delegation may, as a rule, consist of not more than four persons. In accordance with the EEA agreement representatives of Norway, Iceland and Liechtenstein can attend the meetings of the Administrative Commission and its working parties as observers. The same is true for Switzerland since the entry into force, in 2002, of the bilateral agreement between the EU and Switzerland on free movement of persons. Secretarial services are provided by the European Commission (Art. 71(3)), in 7 practice by the unit “free movement of workers and coordination of social security schemes” of DG “Employment, social affairs and inclusion”. The secretariat is run by the Secretary General and his/her collaborators. A representative of the European Commission, usually the head of the competent unit, attends the meetings of the Administrative Commission in an advisory capacity (Art. 71(1)). 3. Working methods

The Administrative Commission meets at least four times a year, normally in 8 two-day sessions. Since first being set up in 1959 it has met more than 340 times. The Administrative Commission is chaired by the member belonging to Rob Cornelissen

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the State whose representative to the Council of the EU holds, for the same period, the office of President of the Council (Art. 3(1) of the rules). The Secretary General, in consultation with the Chair, is in charge of convening the Administrative Commission and drawing up the provisional agenda. The discussions of the various agenda items are prepared by written notes sent in by Member States and the Secretariat. These notes are translated in other languages and made available by the Secretariat to its members by electronic means. The Secretariat is also in charge of drafting the minutes of the meetings reflecting the views of the Member States and the representative of the European Commission on the various agenda points. On a regular basis, the Administrative Commission sets up working parties and/or study groups in order to examine specific problems. 9 Decisions of the Administrative Commission are taken by a qualified majority (Art. 71(2)). The only exception concerns decisions to modify the rules of the Administrative Commission requiring mutual agreement among its members. 10 The last series of enlargements of the EU made everybody aware of the need to take appropriate measures aimed at safeguarding the smooth functioning of the Administrative Commission. To this end the rules of the Administrative Commission were amended, most recently in 2010 (O.J. C 213, p. 20). The introduction of the possibility to adopt a decision by the use of written procedure (Art. 9(2) of the rules) has proven to be an effective instrument. Another example is the possibility for the Administrative Commission to set up an Operational Board (Art. 4 of the rules) aimed at facilitating and simplifying the discussions in the plenary session of the Administrative Commission. Furthermore, the Administrative Commission has made use of the possibility to set up a Conciliation Board (Art. 5 of the rules) to assist its work, in case of differing interpretation between members, of the provisions of the basic and/or implementing regulation. 11 By virtue of Art. 6(5) of its rules the Administrative Commission may set up ad-hoc groups consisting of a limited number of persons to prepare and present the Administrative Commission with proposals for adoption on specific issues. In accordance with this provision the Administrative Commission set up in June 2013 an Executive Board to provide leadership and direction to the European EESSI (Electronic Exchange of Social Security Information) Program (see commentary Art. 78) and to support the Administrative Commission and the Technical Commission in meeting its EESSI objectives. 4. Tasks a) Clarify administrative questions and questions of interpretation (Art. 72(a)) 12

In order to clarify administrative questions and questions of interpretation the Administrative Commission adopts decisions. By virtue of Art. 71(2) decisions on questions of interpretation are to be given the necessary publicity. In practice, all decisions, including administrative ones, are published. Since the entry into

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force of Reg. No. 3 and 4 in 1959, the Administrative Commission has adopted more than 240 decisions and more than 25 recommendations, all published in the Official Journal. In order to facilitate the transition from the old Reg. No. 1408/71 and 574/72 to the current Reg. No. 883/2004 and 987/2009, the Administrative Commission adopted, in 2009, framework Decision H1 (O.J. C 106 of 24 February 2010, p.13). The decisions and recommendations adopted in the past referring to the old regulations do not apply for cases governed by the current regulations. Nevertheless, the said decisions and recommendations remain applicable in the rare cases, referred to in Art. 90(1) and Art. 96(1) IR, where the old regulations remain in force and continue to have legal effects (see commentary Art. 90). The classification of the decisions and recommendations referring to the current regulations correspond to the following system: – “A”: applicable legislation – “E”: electronic data exchange – “F”: family benefits – “H”: horizontal issues – “P”: pensions – “R”: recovery – “S”: sickness benefits – “U”: unemployment benefits As to the question to what extent a national court is bound by a decision of 13 the Administrative Commission, Art. 72(a) itself stipulates that the power of the Administrative Commission to adopt decisions shall be “without prejudice to the right of the authorities, institutions and persons concerned to have recourse to the procedures and tribunals provided for by the legislation of the Member States, by this Regulation or by the Treaty”. Therefore, a national court is not bound by an interpretative decision of the Administrative Commission. The same is true for decisions in which the Administrative Commission regulates details for the implementation of the regulations. There is a constitutional reason for denying a binding character to decisions of the Administrative Commission which has been eloquently worded by Advocate General Warner in the Romano Case (C-98/80, EU:C:1980:267) as follows. There is nothing in the Treaties to suggest that the Union legislature may delegate legislative or interpretative power to a body such as the Administrative Commission. Moreover, by virtue of Art. 263 TFEU the Court of Justice is competent to review the legality and interpretation of acts of institutions of the Union. The Administrative Commission is not an institution of the Union within the meaning of Art. 13 TEU. The Court could, therefore, not pronounce on the legality of an act of the Administrative Commission. The idea of an administrative body empowered to make binding decisions but whose decisions would not be subject to control by the Court would be incompatible with the scheme of the Treaties. In its judgments in Cases 294/83, Les Verts, (EU:C:1998:166), and C-50/00, Union de Pequenos Agricultores, (EU:C:2002:462), the Court underlined that the Treaty had estabRob Cornelissen

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lished a complete system of legal remedies and procedures designed to ensure judicial review of the legality of acts of the institutions and that it had entrusted such review to the Court of Justice. For these reasons the Court ruled in its 1981 Romano judgment (EU:C: 1981:104) that a body such as the Administrative Commission may not be empowered by the legislature to adopt acts having the force of law. “Whilst a decision of the Administrative Commission may provide an aid to social security institutions responsible for applying Community law in this field, it is not of such a nature as to require those institutions to use certain methods or adopt certain interpretations when they come to apply the Community rules”. 14 However, in its case law the Court has also attached great importance to the principle of sincere cooperation within the meaning of Art. 4(3) TEU. This means that Member States are not free to simply ignore or deviate from decisions of the Administrative Commission. The mere fact that a decision of the Administrative Commission does not bind national courts and institutions does not change the fact that these decisions have an authoritative character. The members of the Administrative Commission are experts in a field which is characterized by its complexity. They often have contributed to the wording of provisions of the regulations, not only in their capacity as members of the Administrative Commission, but also as experts in the framework of negotiations in the Social Questions Group of the Council. They are very well placed in interpreting provisions to which they themselves have contributed. The authoritative character of decisions of the Administrative Commission is also illustrated by the fact that the Court sometimes refers to these decisions to confirm its interpretation of provisions of the regulations (e.g. judgment in Case C-238/81, Van der Bunt, EU:C:1983:124). In its judgment in Case C-236/88, Commission versus France, EU:C:1990:303) the Court points out that practical problems in the application of the regulations may always be referred to the Administrative Commission. 15 In its judgments in Cases C-202/97 (Fitzwilliam, EU:C: 2000:75), C-178/97(Banks, EU:C:2000:169) and C-2/05 (Herbosch Kiere, EU:C:2006:69) the Court underlined the important conciliatory role of the Administrative Commission in cases where no agreement is reached between the institutions involved concerning the validity and/or content of a document certifying the applicable social security legislation. The main issue at stake in these three judgments was whether or not the certificate E 101 (corresponding to the current portable document A1), issued by the sending State, had a binding effect on the institutions and judiciary of the host State. According to the Court, on the basis of the principle of sincere cooperation, laid down in Art. 4(3) TEU, the institutions and judiciary of the host State are in principle bound by portable document A1 issued by the institution of the sending State. The principle of sincere cooperation requires that the institution of the sending State carries out a proper assessment of the facts relevant for the application of the rules concerning posted workers and consequently, to guarantee the correctness of the information contained in

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that document. Therefore, a document A1 issued by the institution of the sending State establishes a presumption that posted workers are properly affiliated to the legislation of the sending State. However, it is incumbent on the institution of the sending State to reconsider the grounds for issuing the document and, if necessary, withdraw the document, if the institution of the host State expresses doubts as to the correctness of the facts on which the document is based. Should the institutions concerned not reach agreement, the matter may be brought before the Administrative Commission by the competent authorities. Only if the Administrative Commission does not succeed in reconciling the points of view, the host State may, without prejudice to any legal remedies existing in the sending State, bring infringement proceedings under Art. 259 TFEU in order to enable the Court to examine the correctness of the information contained in the document. The conciliatory role of the Administrative Commission is now reflected in Art. 5(4), 6(3), 16 and 60(4) IR. In view of its new role as conciliator the Administrative Commission has not only set up a Conciliation Board, but has also laid down rules for the application of a dialogue and conciliation procedure concerning the validity of documents, the determination of the applicable legislation and the provision of benefits under the regulations, in Decision A1 of 12 June 2009 (O.J. C 106 of 24 April 2010, p. 1). See also commentary on Art. 76(6) and on Art. 6 IR. b) Promote exchange of experience and best administrative practices (Art. 72 b))

This task of the Administrative Commission was not mentioned in Art. 81 of 16 the old Reg. No. 1408/71. However, the purpose pursued, namely the added value for all competent actors resulting from the exchange of best practices, was already to be found in the old Art. 137(2) TEC, corresponding to the current Art. 153(2) TFEU. The exchange of experience aims to facilitate the uniform application of Union law. In line with this new task the Administrative Commission decided in 2010 to discuss, once a year, cooperation on fraud and error issues. The discussions are based on voluntary reporting from Member States about their experience and progress in this field (Decision H5, O.J. C 149 of 8 June 2010, p.5). Decision H5 also contains in an annex a list of best practices with regard to combatting the non-reporting of death in cross-border cases. c) Foster and develop cooperation between Member States (Art. 72 c))

The Administrative Commission plays an indispensable role as body of coop- 17 eration and advice. A smooth cooperation of the provisions of the regulations is only possible if a good and close cooperation between Member States is guaranteed (see commentary Art. 76). The IR as a whole has as one of its main objectives a close and effective cooperation between Member States’ social security institutions. During the negotiations of the 1998 Commission proposal leading to the 18 adoption of Reg. No. 883/2004, European Parliament insisted that the AdminisRob Cornelissen

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trative Commission should be responsible in particular for dealing with problems in the field of social security faced by frontier workers. Council, however, did not want specific treatment for different categories of workers. The final result in the text of Art. 72(c) is a compromise: the cooperation between Member States and their institutions should be developed, inter alia “to take into account particular questions regarding certain categories of persons”. By this wording allusion is made to frontier workers without saying it explicitly. 19 Another task of the Administrative Commission is to facilitate the realization of actions of cross-border cooperation in the area of coordination of social security systems. There are several examples of such cross-border cooperation between institutions, to the benefit of EU citizens, such as the cooperation between institutions of the Netherlands, Belgium and Germany in the Maas/Rhine region. d) Encourage the use of new technologies (Art. 72 d))

By virtue of Art. 72 d) the Administrative Commission has to encourage as far as possible the use of new technologies in order to facilitate the free movement of persons, in particular by modernizing procedures for exchanging information and adapting the information flow between institutions for the purposes of exchange by electronic means. In doing so, it has to take into account the development of data processing in each Member State. In comparison with the old Reg. No. 1408/71, the role of the Administrative Commission in the modernization of the procedures for the exchange of information has been strengthened. In fact, the Administrative Commission has to adopt the common structural rules for data processing services, in particular on security and the use of standards, and to lay down provisions for the operation of the common part of those services. 21 In view of this new task of the Administrative Commission, Art. 4 IR is of particular importance. It stipulates that the transmission of data between the institutions or liaison bodies shall be carried out by electronic means under a common secure framework that can guarantee the confidentiality of exchanges of data. The shift from paper to electronic data exchange has required and continues to require very demanding and time-consuming preparations by all actors involved (see commentary on Art. 73 and on Art. 78). In 2006 a Taskforce was created made up of members of the Administrative Commission and of the Technical Commission, as well as a number of ad-hoc groups. Thanks to this preparatory work the Administrative Commission reached agreement on a common European infrastructure for the EESSI project. This project has to ensure that Member States will exchange data electronically under the regulations (see commentary Art. 78, point 1.d) 22 In 2011 the abovementioned Taskforce was replaced by the EESSI Steering Committee, which monitored the implementation process of EESSI in the Member States, based on tools agreed in the Technical Commission, namely the national action plans and a scoreboard. In June 2013 the Administrative Commission approved a new, more rigorous, governance model for the EESSI project. 20

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As part of that new model the Executive Board has been established (see above under 3) to oversee the project on a day to day basis. e) Make proposals to the Commission to improve and modernize the Union acquis (Art. 72 f)

In a general way, the Administrative Commission functions as a body to deal, 23 at Union level, with all problems concerning the application of the regulations and to improve the regulations. Obviously, the Commission has the right of initiative with regard to legislative proposals (Art. 17(2) TEU), but in order to fulfill this role correctly it depends on information delivered by the Administrative Commission. In fact, in order to be able to prepare proposals to modify the legal framework at Union level, the Commission needs detailed information about the content of national legislation as well as on the impact changes in national legislation might have on the application of the current regulations and on the results of such application. In December 2013 the Think Tank of trESS (the social security expert net- 24 work financed by the European Commission) presented a report to the Administrative Commission about key challenges for the social security regulations in the perspective of 2020. Following the presentation of this report, the Administrative Commission established a Reflection Forum: “EU social security coordination 2020 and beyond”. The main purpose of this Forum is to have a reflection process within the Administrative Commission on the long-term perspective of EU social security coordination. f) Adopt the annual accounts between institutions of Member states (Art. 72 g))

In accordance with Art. 72 g) the Administrative Commission establishes the 25 factors to be taken into account for drawing up accounts relating to the costs to be borne by the institutions of the Member States under the regulation and adopts the annual accounts between those institutions. The work of the Administrative Commission on this point is based on the report of the Audit Board (see commentary Art. 74). g) Other tasks (Art. 72 e))

The tasks of the Administrative Commission also include the ones referred to 26 in Article 72 e), in particular the concrete tasks allotted by Art. 19(2), 33(2), 34(2), 76(2) and 87(10 b) as well as by Art. 4(1)and(3), 31(4), 43(3), 48(1), 52(2), 61, 62(2), 64(5)and(6), 69(1)and(2), 75(3), 86(1)(2)and(3), 88(3), 89(1), 90 and 95(2) IR. Attention is drawn in particular to the following tasks. aa) Structured electronic documents and portable documents

One of the main tasks of the Administrative Commission in the framework of 27 EESSI is to decide on the structure, content and format of the documents to be

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exchanged electronically between social security institutions - the so-called structured electronic documents (Art. 4(1) IR). The exchange of information is done by direct contacts between institutions. However, in some cases, citizens are involved in the exchange of information as well. Where it is necessary for the application of the regulations, the institutions issue documents to the persons concerned, by virtue of Art. 3(4) IR. These documents are portable documents. Document A1 (corresponding to the old form E 101) is an example. There are in total 10 portable documents, including the European Health Insurance Card. Each document is about an individual person (possibly including family members) and contains their names and other identifiers. The issuing institution duly signs it. The content and format of these documents (available on the website of the European Commission) have been determined by the Administrative Commission. bb) The European Health Insurance Card (EHIC)

Since its introduction in 2004 the EHIC has become an important symbol of Europe for many of its citizens. Thanks to Art. 19(1) all persons who are insured under the legislation of a Member State are entitled to benefits in kind which become necessary during a stay in another Member State. By virtue of Art. 25(1) IR, the insured person must present to the health care provider in the Member State of stay a document issued by the competent institution indicating his entitlement to benefits in kind. This document is the EHIC, available free of charge. According to the latest figures available, there are around 200 million EHIC holders, representing more than half of the insured population of Europe. 29 In its Decision S1 of 12 June 2009 (O.J. C 106 of 24 February 2010, p. 23) the Administrative Commission has laid down the general principles as well as the data on the EHIC. The technical specifications of the EHIC are contained in Decision S2 of 12 June 2009 (O.J. C 106 of 24 February 2010, p. 26). It is an individual card made out in the name of the card holder. It certifies that the holder of the card is entitled to benefits in kind in the Member State of stay in accordance with the legislation of that State, as though he/she were insured in that State. The holder of the card has direct access to the health care provider. The card also guarantees that the issuing Member State will fully refund the costs to the Member State of stay. The period of validity of the EHIC is determined by the issuing institution. 30 Given that the use of health and social security cards differs widely from one Member State to another, the EHIC is initially introduced in a format in which the data necessary for the provision of health care and the reimbursement of the costs can be read with the naked eye. This information may additionally be incorporated in an electronic medium. The use of an electronic medium will furthermore become generalized at a later stage. This should finally result in the ‘electronification’ of the EHIC (eEHIC). 28

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If follows from a report of an independent research network financed by the 31 European Commission and presented to the Administrative Commission in June 2014 that the EHIC functions rather well. In most cases patients presenting the EHIC receive the necessary health care without any problems. However, there are a growing number of refusals by health care providers. It seems that most (but not all) of these refusals are related to lack of knowledge about the EHIC both among health care practitioners and insured persons. The insured persons should be aware, for instance, that the EHIC does not guarantee entitlement to private health care (which is out of the public health care system of the Member State of stay). cc) Information

Art. 89(1) IR entrusts the Administrative Commission with the task of prepar- 32 ing the information needed to ensure that the parties concerned are aware of their rights and the administrative formalities required in order to assert them. Where possible this information should be disseminated electronically via publication online on sites accessible to the public. The Administrative Commission also has to ensure that this information is regularly updated. Furthermore the Administrative Commission has to monitor the quality of the services provided to customers. To this end a guide has been produced providing information about social se- 33 curity rights for people moving between Member States. As from 2011, MISSOC is in charge of updating a series of guides to national social security systems, more specifically designed to inform citizens moving within Europe. The content and format of these guides are currently being reviewed in order to increase their user-friendliness. In addition, a number of videos are available on the website of the European Commission. The website also offers detailed information about cross-border health care. Finally, the Administrative Commission has published a Practical Guide on the applicable legislation in the EU, EEA and Switzerland. This guide provides a very valuable working instrument to assist institutions, employers and citizens in the area of determining which Member States’ legislation should apply in given circumstances. dd) Tasks in the framework of the external dimension of EU social security coordination

In 2012 the European Commission presented a communication: “The external 34 dimension of EU social security coordination” (COM(2012) 153 fin). In this communication the Commission advocated a mechanism to strengthen cooperation between Member States on social security cooperation with third countries. Following this communication a Forum on the international dimension of social security coordination was created in 2013 in order to facilitate such cooperation. This Forum, which meets annually, could be seen as a working group of experts focused on the exchange of information between Member States on their experiRob Cornelissen

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ences in negotiations with third countries. This Forum is also an opportunity for the European Commission to share information on the state of play in negotiations on EU agreements with third countries. Furthermore, the Forum is the ideal place to reflect on the content of social security coordination provisions to be included in future EU agreements with third countries. In the framework of the Forum Member States could also explore the possibility to act jointly on social security coordination in respect of (one or more) third countries. 35 Several Association Agreements concluded between the EU and third countries contain principles which are to govern the coordination of social security rules for workers and their families who move between the associated country and the EU. The Association Councils set up by these agreements have been given the task of adopting provisions to implement these principles. In October 2010 the Council of the EU took a first step in this process by deciding on the position to be taken by the EU within the Association Councils set up by the agreements with six associated countries (Morocco, Algeria, Tunisia, FYROM, Croatia and Israel, O.J. L 306 of 23 November 2010). In December 2012, the Council agreed on the position to be taken by the EU within the Association Councils set up with four other associated countries (San Marino, Montenegro, Albania and Turkey, O.J. L 340 of 13 December 2012). The Association Council Decisions, once adopted, must be implemented by the Member States. The draft Decisions provide for a framework of cooperation and verification mechanisms as well as for a reciprocal duty of exchange of information between the institutions of the Member States and the third countries to ensure the correct implementation of the Decisions. The Administrative Commission is now in the process of identifying the forms and documents to be used by the competent institutions for the implementation of these Decisions.

Article 73 Technical Commission for Data Processing (1) A Technical Commission for Data Processing (hereinafter called the "Technical Commission") shall be attached to the Administrative Commission. The Technical Commission shall propose to the Administrative Commission common architecture rules for the operation of data-processing services, in particular on security and the use of standards; it shall deliver reports and a reasoned opinion before decisions are taken by the Administrative Commission pursuant to Article 72(d). The composition and working methods of the Technical Commission shall be determined by the Administrative Commission. (2) To this end, the Technical Commission shall: (a) gather together the relevant technical documents and undertake the studies and other work required to accomplish its tasks; (b) submit to the Administrative Commission the reports and reasoned opinions referred to in paragraph 1; (c) carry out all other tasks and studies on matters referred to it by the Administrative Commission;

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Article 73 (d) ensure the management of Community pilot projects using data-processing services and, for the Community part, operational systems using data-processing services. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Composition and working methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose

The coordination system set up by the regulations cannot function if there is 1 not a good and solid system of exchange of data between the social security institutions of Member States. From its very beginning the Community regulations have contained a set of rules concerning the practical implementation of the coordination system. The provisions related to the practical implementation are to be found in the IR which defines all the flows of information between the various social security institutions in charge of implementing the rules. Under the old Reg. No. 574/72 the Administrative Commission had estab- 2 lished almost 100 different model paper forms, the so-called E-forms, which were used on a daily basis by the institutions of the Member States for the exchange of information about insured persons. Gradually it became clear to everybody that for a more secure and rapid exchange of information the communication methods and procedures between the institutions should be improved, and that the use of paper forms should be replaced by modern means. In order to underline the importance of the development and use of telematics services for the exchange of information, the legislature decided, in 1997, by inserting Art. 117 c in Reg. No. 574/72, to create a Technical Commission charged with specific responsibilities in the field of data processing under the aegis of the Administrative Commission (Reg. No. 1290/97, O.J. L 176 of 4 July 1997, p.1). Under the current regulations, the importance of the Technical Commission has been further underlined by the fact that its existence and tasks are dealt with not by the IR, but by the basic regulation. The main role of the Technical Commission is to assist the Administrative Commission in fulfilling the latter’s task foreseen by Art. 72 d) and by Art. 4 IR, namely to modernize procedures for exchanging information and to ensure the transmission of data between institutions by electronic means under a secure framework. II. Commentary 1. Composition and working methods

The composition and working methods of the Technical Commission are de- 3 termined by the Administrative Commission. This is logical, given the fact that the Technical Commission is attached to the Administrative Commission (Art. 73(1)). In June 2009 the Administrative Commission adopted Decision H2

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concerning the methods of operation and the composition of the Technical Commission (O.J. C 106 of 24 February 2010, p.17). The Technical Commission is made up of two members from each Member State, one of whom is the standing member, with the other designated as his/her deputy. As is the case with the Administrative Commission, representatives of Norway, Iceland, Liechtenstein and Switzerland can attend the meetings of the Technical Commission as observers (see commentary Art. 71 and 72). Reports and reasoned opinions are adopted by simple majority of all members of the Technical Commission, each Member State having a single vote. The reports or reasoned opinions must indicate whether they are reached unanimously or by simple majority. They must, should there be a minority, set out the conclusions or reservations of the minority. The chair of the Technical Commission is held by the member representing the Member State holding the chair of the Administrative Commission (see commentary Art. 71 and 72). The Technical Commission may set up ad hoc working groups to consider specific issues (such as the electronic exchange of the EHIC data). The secretariat of the Administrative Commission is also in charge of the preparation and organization of the meetings of the Technical Commission. It also draws up the minutes of the meetings of the Technical Commission. Each year the Technical Commission submits a detailed work program to the Administrative Commission for its approval. In addition, it reports on a yearly basis to the Administrative Commission on its activities and achievements in relation to the work program. The Technical Commission meets four times a year, normally in two-day sessions. 2. Tasks

As said above, the main task of the Technical Commission is to support the Administrative Commission in its task to improve procedures for exchanging information and to ensure the transmission of data between institutions by electronic means under a secure framework. By virtue of Art. 4 IR the transmission of data between social security institutions must be carried out by electronic means (with a transitional period). Obviously the shift from exchange of data by paper forms to exchange by electronic means requires substantial efforts and preparations by all actors involved. Thanks to the preparatory work of the Technical Commission and the Taskforce, in which the Technical Commission was also represented, the Administrative Commission reached agreement on a common European infrastructure for the EESSI project (see commentary Art. 71 and 72). 5 In June 2013 the Administrative Commission set up an Executive Board to provide leadership and direction to the EESSI program. Within this new EESSI governance model, the Executive Board manages the project on a day to day basis on behalf of the Administrative Commission and Technical Commission. The Executive Board is in a position to meet regularly and to provide guidance and continuity over a given period. Obviously, the Administrative Commission con4

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tinues to be the head of the hierarchy in the new governance model. The role of the Technical Commission is to set a clear direction for the overall implementation of the program. Because of its specialized knowledge about, and practical experience with data processing, it plays a vital role in the management of the EESSI project and other projects using data-processing services, such as the electronification of the EHIC. More specifically, with regard to the EESSI implementation, the Technical Commission is entrusted with the task of managing pure operational and technical matters and approving technical solutions that are most appropriate to address the business and technical needs in the Member States for the implementation of EESSI. In a general way, the Technical Commission has accountability for ensuring that the project delivers a sufficient and robust EESSI system as described in the mandate set by the Administrative Commission. To this end, it has elaborated the main instruments for the regular monitoring of the EESSI implementation in the Member States, namely templates for the national action plans and a scoreboard to measure progress. The Technical Commission also agreed to set up a Security Expert Forum. This Forum provides the EESSI governance bodies with technical assistance in the information security field. It reviews periodically the security policy and acts on high priority information security incidents by identifying immediate and effective responses and/or by identifying organizational and technical containment measures to avoid or limit a security incident’s effect. The development of an EESSI anti-malware standard and of an EESSI information security incident management standard is part of its mandate. One of the main tasks of the Technical Commission is to propose to the Ad- 6 ministrative Commission common architecture rules for the operation of dataprocessing services, in particular on the use of standards (Art. 73(1)). An ad-hoc group on data modelling was created in December 2013 by the Administrative Commission on a proposal made to that effect by the Technical Commission. It is in charge of assisting with the enhancements in the electronic data model of EESSI, especially from an information architecture point of view. The task of the ad-hoc group includes making concrete proposals for the principles for data modelling, which should ultimately lead to the elaboration of the EESSI-dataexchange European standard. The Technical Commission has played, and continues to play, a key role in 7 the elaboration of the structure, content, format and detailed arrangements of the structured electronic documents. It has also assisted the Administrative Commission in the establishment of the structure, content and detailed arrangements of the electronic directory, referred to in Art. 88 and Annex 4 IR (see commentary Art. 78).

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Article 74 Audit Board (1) An Audit Board shall be attached to the Administrative Commission. The composition and working methods of the Audit Board shall be determined by the Administrative Commission. The Audit Board shall: (a) verify the method of determining and calculating the annual average costs presented by Member States; (b) collect the necessary data and carry out the calculations required for establishing the annual statement of claims of each Member State; (c) give the Administrative Commission periodic accounts of the results of the implementation of this Regulation and of the Implementing Regulation, in particular as regards the financial aspect; (d) provide the data and reports necessary for decisions to be taken by the Administrative Commission under Article 72(g); (e) make any relevant suggestions it may have to the Administrative Commission, including those concerning this Regulation, in connection with subparagraphs (a), (b) and (c); (f) carry out all work, studies or assignments on matters referred to it by the Administrative Commission. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Composition and working methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose

Chapters 1 and 2 of Title III contain several provisions guaranteeing in a number of cross-border situations that insured persons and the members of their families residing or staying in a Member State are entitled to benefits in kind to be provided by that Member State on behalf of the competent Member State. By virtue of Art. 35 and 41 the benefits provided by the institution of a Member State on behalf of another Member State shall be fully reimbursed. There are two ways to determine the reimbursements. Reimbursements on production of proof of actual expenditure (Art. 62(1) IR) are the rule. However, for those Member States whose legal or administrative structures are such that the use of reimbursement on the basis of actual expenditure is not appropriate, reimbursements are determined on the basis of fixed amounts (Art. 63 IR). The latter Member States are listed in Annex 3 IR. Art. 64 IR contains very detailed provisions on how to calculate the fixed amounts, on the basis of a calculation of the average cost per person and by distinguishing between three age groups. 2 A smooth application of the reimbursement system is essential for the functioning of the coordination rules. A Member State having provided benefits in kind to persons on behalf of another Member State must have the guarantee that it is reimbursed in a reasonable period of time. If the reimbursement system does not work properly, it could undermine the coordination system as such. It is the 1

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role of the Audit Board to assist the Administrative Commission in ensuring that the reimbursement system functions well. The importance of this role is underlined by the fact that under the current regulations the tasks of the Audit Board are dealt with not by the IR, as was the case under the old system, but by the basic regulation. II. Commentary 1. Composition and working methods

The composition and working methods of the Audit Board are determined by 3 the Administrative Commission. This is logical, given the fact that the Audit Board is attached to the Administrative Commission (Art. 74(1)). In December 2009 the Administrative Commission adopted Decision H4 concerning the methods of operation and the composition and methods of operation of the Audit Board (O.J. C 107 of 24 February 2010, p.3). On the basis of this Decision, the composition and methods of operation of the Audit Board are very much in line with those for the Technical Commission (see commentary Art. 73). The Audit Board is assisted by an “independent expert”, the so-called Rapporteur, or expert team with professional training and experience in matters concerning the functions of the Audit Board (Art. 3(3) of Decision H4), on the basis of a contract with the European Commission. In view of its conciliatory role envisaged by Art. 67(7) IR (see below point 2), the Audit Board may set up a Conciliation Panel (Art. 2(3) of Decision H4). 2. Tasks

As said before, benefits in kind provided by the institution of a Member State 4 on behalf of another Member State have to be reimbursed. All the tasks enumerated in Art. 74 reflect the Audit Board’s role as supervisor of a proper and speedy settlement of claims between the institutions. It is the Audit Board which prepared Decision S5 of the Administrative Commission of October 2009 (O.J. C 106 of 24 February 2010, p. 54). This Decision clarifies in detail which kind of expenditure is to be considered as “benefits in kind” when calculating the refunds. This Decision also contains detailed provisions for the calculation of the fixed amounts provided for in Art. 63 IR. As supervisor of a proper and speedy settlement of claims between institu- 5 tions, the Audit Board is in charge of the establishment of an annual report on the situation of the claims between Member States for each calendar year (Art. 72 g). In practice, it is the Rapporteur (see above, point 1) who establishes the draft annual report on the situation of the claims between Member States. The annual report contains an analysis and summary of the notes and detailed financial tables provided by each Member State. The tables in the report show the relative situation of each Member State with regard to debits and credits, the breakdown by type of claims (lump-sum claims or invoiced claims) in relation Rob Cornelissen

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to the reference year in question, as well as a comparative analysis with the previous reference years. After approval by the Audit Board the report is sent to the Administrative Commission which formally adopts the annual accounts. 6 In cases mentioned above (point I), reimbursements between institutions are based on the average costs in the Member State having provided the benefits in question. Therefore, the establishment of the average costs plays an important role in the function of the coordination system. The average cost calculations of Member States are based on national statistics. This information is laid down in a national note and sent to the members of the Audit Board as well as to the rapporteur. Every Member State has to follow a standard model of presentation elaborated by the Audit Board. When the national note is discussed at the meeting of the Audit Board, any delegation can question the accuracy of the basis used for the calculations and make its approval subject to clarification and explanation by the Member State in question. In practice it is primarily the rapporteur who – examines whether a sufficient level of detail and precision has been provided in each of the Member States’ notes on average costs – verifies the methodology used by each Member State and the available statistics justifying the basis of the calculation of the average health costs – verifies whether the standard model of presentation has been followed and the relevant Administrative Decisions (in particular Decisions S4, S5 and S6) have been respected – verifies the continuity and coherence with previous notes of the Member State concerned on average health care costs 7

The experience of the last decades shows that the functioning of the reimbursement system is sometimes cumbersome. As to claims based on invoices (‘actual expenditure’), requests for payments are in a number of cases inaccurate or perceived as inaccurate. Obviously such claims lead to delays in settlement. In addition, requests are sometimes submitted late. Claims not submitted in a timely manner are more likely to be disputed and could lead to an increasing number of unsettled balances. On the other hand, it also has happened that claims submitted in time by an institution for benefits provided to a person under the legislation of a Member State were disputed by the debtor Member State without sufficient justification. Experience shows that significant delays also occur in the settlement of claims based on average costs. In fact, average cost information is based on calculations provided by each Member State. These calculations are often complex as they reflect the diversity of the public health care systems of the Member States. A solid verification of such information provided by the Member States requires a profound knowledge of Member States’ national health care systems. Inaccurate information without a sufficiently solid verification may lead to inaccurate average cost calculations which may undermine Member States’ trust in the average costs information provided by other Member States. In addition, Member States were often very late in submitting their 442

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average costs calculations. Also a late submission of average cost calculations contributes to an increase in the number of unsettled claims. In order to prevent a build-up of claims which remain unsettled for a long period of time, and in order to speed up the reimbursement procedures, a number of provisions have been inserted in the IR, in particular Art. 65-68. Art. 65(1) IR, for instance, stipulates that the annual average cost per person in each age group for a specific year shall be notified to the Audit Board at the latest by the end of the second year following the year in question. Art. 67 IR contains deadlines for the introduction and settlement of claims. In order to facilitate the final closing of accounts, the Audit Board has been given a kind of reconciliatory role by Art. 67(7) IR. In view of this role, the Audit Board may set up a Conciliation Panel by virtue of Art. 2(3) of Decision H4. Recently the Audit Board has adopted a mandate containing the details of the composition, tasks and working methods of the Conciliation Panel. No later than 1 May 2015 the Administrative Commission has to present a re- 8 port which may serve as a basis for a review of the fixed amounts calculation method aimed at avoiding unbalanced payments between Member States (Art. 64(5) IR). In addition, Art. 86 IR requires specific reporting and auditing from the Administrative Commission on the functioning of the reimbursement provisions. These review clauses presuppose evidence based preparatory work from the Audit Board. For this reason, the “independent expert” within the meaning of Art. 3(3) of Decision H4 has been entrusted with the task, on the basis of a contract concluded with the European Commission, to establish and update a database of key summary financial and demographic data which relate to the actual situation of the claims between Member States and its evolutions, as well as the calculation and evolution of the average costs. This task also entails contributing to discussions on future establishment of a new information and communication (ICT) system for data collection and reporting which would allow tracking of Member States’ claims for reimbursements and show the status of those claims.

Article 75 Advisory Committee for the Coordination of Social Security Systems (1) An Advisory Committee for the Coordination of Social Security Systems (hereinafter referred to as "Advisory Committee") is hereby established, comprising, from each Member State: (a) one government representative; (b) one representative from the trade unions; (c) one representative from the employers' organisations. For each of the categories referred to above, an alternate member shall be appointed for each Member State. The members and alternate members of the Advisory Committee

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Part 2: Regulation (EC) No 883/2004 shall be appointed by the Council. The Advisory Committee shall be chaired by a representative of the European Commission. The Advisory Committee shall draw up its rules of procedure. (2) The Advisory Committee shall be empowered, at the request of the European Commission, the Administrative Commission or on its own initiative: (a) to examine general questions or questions of principle and problems arising from the implementation of the Community provisions on the coordination of social security systems, especially regarding certain categories of persons; (b) to formulate opinions on such matters for the Administrative Commission and proposals for any revisions of the said provisions.

I. Spirit and Purpose 1

The Advisory Committee has existed since 1 October 1972, the date of entry into force of the old Reg. No. 1408/71. By bringing together in an Advisory Committee representatives of workers and employers to examine the problems dealt with by the Administrative Commission, the legislature responded at that time to a request formulated by trade unions and employers’ organizations, a request supported by Parliament and the Economic and Social Committee. Such involvement of workers and employers is fully legitimate, since the regulations are of great direct importance not only to workers, but also to employers, in particular the provisions laid down in the regulations which determine the applicable legislation and thereby the level of social security contributions due. The creation of a tripartite Advisory Committee fits perfectly well in the Commission’s task to encourage a social dialogue at European level. In this context it is worthwhile mentioning that the predecessor of the current Art. 154 and 155 TFEU, namely Art. 118 b EEC (“The Commission shall endeavor to develop the dialogue between management and labour at European level, which could….”) was inserted in the EEC Treaty only in 1987 by Art. 22 of the Single European Act (O.J. L 169 of 29 June 1987). II. Commentary

Art. 75 contains fewer details about the functioning and working methods of the Advisory Committee than Art. 82 of the old Reg. No. 1408/71. The working methods, frequency of meetings, etc. are now laid down in the rules of procedure adopted by the Advisory Committee itself (O.J. C 330 of 8 December 2010, p. 3). Since the revision of the rules of procedure in 2012, the proceedings and the documents of the Advisory Committee are no longer confidential. The agendas, discussion documents and minutes of the meetings of the Advisory Committee are now available to the general public via the Commission’s CircaBC server. 3 In the field of free movement, there are currently two tripartite Advisory Committees- the Advisory Committee for the coordination of social security schemes, and the Advisory Committee on free movement of workers created by 2

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Reg. No. 1612/68, codified in Reg. No. 492/2011. In June 1998 the Commission presented a proposal for a European Parliament and Council Decision to establish an Advisory Committee on freedom of workers and social security (O.J. C 344 of 12 November 1998). The idea was that the creation of a single Advisory Committee to discuss matters in connection with free movement and social security could lead to a more effective Committee by enabling it to adopt an overall strategy on freedom of movement going beyond technical issues. The proposal to merge the existing Advisory Committees on free movement and social security was also inspired by the wish to rationalize their resources and to improve their operation. However, this proposal has never been discussed at Council’s level. It has now been withdrawn. In accordance with Art. 75(2) the Advisory Committee is empowered, at the 4 request of either the European Commission, the Administrative Commission, or on its own initiative to examine general questions or questions of principle with regard to the coordination of social security schemes, “especially regarding certain categories of persons”. The last words refer not only to frontier workers, but also to third country nationals. Under Art. 83 of the old Reg. No. 1408/71, the competence of the Advisory Committee was limited to questions or problems arising from the implementation of the regulations adopted within the framework of Art. 42 EC. The mandate under Art. 75(2) is broader, since it empowers the Advisory Committee to examine questions and problems “arising from the implementation of Community provisions on the coordination of social security systems”. This wording also covers the regulations adopted on the basis of Art. Art. 79(2)(b) TFEU, such as Reg. No. 1231/2010. The second task of the Advisory Committee is to formulate opinions for the 5 Administrative Commission and proposals for any revisions of the Union provisions on the coordination of social security schemes. By virtue of Art. 89(2) IR, the Advisory Committee also has a mandate concerning the improvement of information on social security coordination and its dissemination to all parties concerned. To that end it may issue opinions and recommendations.

Title V Miscellaneous Provisions Bibliography: Bauer/Asslaber, Elektronischer grenzüberschreitender Datenaustausch von Sozialversicherungsdaten: Projekt EGDA, SozSich 2011, p. 238, Coutenceau/Rapaud, le recouvrement des cotisations de sécurité sociale dans la Communauté européenne, Droit social 1993, p.580, Eichenhofer, Internationales Sozialrecht und Internationales Privatrecht, 1987, Eichenhofer, Grenzüberschreitender Einzug von Sozialversicherungsbeiträgen im Rahmen der Verordung (EWG) Nr 1408/71, DRV 1999, p. 48, Hoffmann, Rowe and Türk, Administrative Law and Policy of the European Union, 2011, Holoubek and Lang, Verfahren der Zusammenarbeit von Verwaltungsbehörden in Europa, 2011, Pitschas, Strukturen des europäischen Verwaltungsrechts - Das kooperative Sozial-und Gesundheitsrecht der Gemeinschaft, in: Schmidt-Assmann/Hoffmann-Riem (eds), Strukturen des Europäischen Verwaltungsrecht,

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Part 2: Regulation (EC) No 883/2004 1999, p. 123, van Raepenbusch, le devoir de loyauté dans l’ordre juridique communautaire, Droit social, no 11, 1999, p. 908, Spiegel, Datenaustausch im sozialen Verwaltungsbereich: die Rolle des Hauptverbandes im zwischenstaatlichen und internationalen Bereich der sozialen Sicherheit; SozSich 2011, p. 180, Temple Lang, The Principle of Loyal Cooperation and the Role of the National Judge in Community, Union and EEA Law, ERA Forum, number 4, p. 476, Wenander, Recognition of Foreign Administrative Decisions, Balancing International Cooperation, National Self-Determination, and Individual Rights, Zeitschrift für ausländisches öffentliches Recht und Völkerrecht, 2011, p. 755, Wenander, A Network of Social Security Bodies- European Administrative Cooperation under Regulation (EC) No 883/2004, Review of European Administrative Law 2013, p. 39, Wettner, die Amtshilfe im Europäischen Verwaltungsrecht, 2005.

Overview Good administration and cooperation can be seen as one of the main principles on which the European social security regulations are based (Jorens/Van Overmeiren, General principles of coordination in Regulation 883/2004, p. 48). In fact, a close and effective cooperation between the authorities and institutions of the various Member States is a key factor for an efficient functioning of the Union rules on the coordination of national social security systems. One of the most important elements of good cooperation under the current regulations is an improved exchange of information between authorities and institutions, and citizens. To this effect, Title V contains several provisions requiring good administrative assistance to be provided by authorities and institutions, direct communication between the authorities and with the citizens, the prohibition of the refusal of claims or documents based on language, the mutual information duty between citizens and institutions, and the obligation of the latter to respond to queries within a reasonable period of time. It also provides rules on the protection of personal data. These general provisions are supplemented by detailed rules in the IR about provisional application of legislation and the provisional payment of benefits. All these provisions aim at reducing the impact of administrative complications on the enforcement of the rights of the beneficiaries.Other provisions laid down in Title V and the IR require that the transmission of data is carried out, after a transitional period, by electronic means. It is to be expected that the Electronic Exchange of Social Security Information (EESSI) will contribute to a more secure and rapid exchange of information and to an improved quality in the exchange of data.Title V also deals with cooperation between institutions in a very specific field, namely the cross-border collection of contributions and recovery of benefits which were unduly paid. The current IR has created a legal framework at Union level for cross-border recovery of contributions and of unduly paid benefits, a framework which was inspired by Union legislation in the field of taxation. The provisions on cross-border recovery of contributions and benefits could be seen as a means of preventing and tackling abuses and fraud (see recital 19 IR). 446

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As ist heading indicates, Title V also contains a number of other miscellaneous provisions, dealing with issues such as how medical examinations provided for by the legislation of one Member State may be carried out in another Member State, or to which extent a social security institution may, in a crossborder situation, exercise any direct or subrogated rights it has against a liable person. The commentary on these provisions is based on the commentary of Bernhard Spiegel published in the original German version by NOMOS.

Article 76 Cooperation (1) The competent authorities of the Member States shall communicate to each other all information regarding: (a) measures taken to implement this Regulation; (b) changes in their legislation which may affect the implementation of this Regulation. (2) For the purposes of this Regulation, the authorities and institutions of the Member States shall lend one another their good offices and act as though implementing their own legislation. The administrative assistance given by the said authorities and institutions shall, as a rule, be free of charge. However, the Administrative Commission shall establish the nature of reimbursable expenses and the limits above which their reimbursement is due. (3) The authorities and institutions of the Member States may, for the purposes of this Regulation, communicate directly with one another and with the persons involved or their representatives. (4) The institutions and persons covered by this Regulation shall have a duty of mutual information and cooperation to ensure the correct implementation of this Regulation. The institutions, in accordance with the principle of good administration, shall respond to all queries within a reasonable period of time and shall in this connection provide the persons concerned with any information required for exercising the rights conferred on them by this Regulation. The persons concerned must inform the institutions of the competent Member State and of the Member State of residence as soon as possible of any change in their personal or family situation which affects their right to benefits under this Regulation. (5) Failure to respect the obligation of information referred to in the third subparagraph of paragraph 4 may result in the application of proportionate measures in accordance with national law. Nevertheless, these measures shall be equivalent to those applicable to similar situations under domestic law and shall not make it impossible or excessively difficult in practice for claimants to exercise the rights conferred on them by this Regulation. (6) In the event of difficulties in the interpretation or application of this Regulation which could jeopardise the rights of a person covered by it, the institution of the competent Member State or of the Member State of residence of the person concerned shall contact the institution(s) of the Member State(s) concerned. If a solution cannot be found within a reasonable period, the authorities concerned may call on the Administrative Commission to intervene. (7) The authorities, institutions and tribunals of one Member State may not reject applications or other documents submitted to them on the grounds that they are written in an

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Part 2: Regulation (EC) No 883/2004 official language of another Member State, recognised as an official language of the Community institutions in accordance with Article 290 of the Treaty. Article 2 Reg. No. 987/2009 Scope and rules for exchanges between institutions (1) For the purposes of the implementing Regulation, exchanges between Member States’ authorities and institutions and persons covered by the basic Regulation shall be based on the principles of public service, efficiency, active assistance, rapid delivery and accessibility, including e-accessibility, in particular for the disabled and the elderly. (2) The institutions shall without delay provide or exchange all data necessary for establishing and determining the rights and obligations of persons to whom the basic Regulation applies. Such data shall be transferred between Member States directly by the institutions themselves or indirectly via the liaison bodies. (3) (see under Art. 81) (4) (see under Art. 81) Article 3 Reg. No. 987/2009 Scope and rules for exchanges between the person concerned and institutions (1) (see under Art. 87) (2) Persons to whom the basic Regulation applies shall be required to forward to the relevant institution the information, documents or supporting evidence necessary to establish their situation or that of their families, to establish or maintain their rights and obligations and to determine the applicable legislation and their obligations under it. (3) (see under Art. 77) (4) To the extent necessary for the application of the basic Regulation and the implementing Regulation, the relevant institutions shall forward the information and issue the documents to the persons concerned without delay and in all cases within any time limits specified under the legislation of the Member State in question. The relevant institution shall notify the claimant residing or staying in another Member State of its decision directly or through the liaison body of the Member State of residence or stay. When refusing the benefits it shall also indicate the reasons for refusal, the remedies and periods allowed for appeals. A copy of this decision shall be sent to other involved institutions. Article 5 Reg. No. 987/2009 Legal value of documents and supporting evidence issued in another Member State (1) Documents issued by the institution of a Member State and showing the position of a person for the purposes of the application of the basic Regulation and of the implementing Regulation, and supporting evidence on the basis of which the documents have been issued, shall be accepted by the institutions of the other Member States for as long as they have not been withdrawn or declared to be invalid by the Member State in which they were issued. (2) Where there is doubt about the validity of a document or the accuracy of the facts on which the particulars contained therein are based, the institution of the Member State that receives the document shall ask the issuing institution for the necessary clarification and, where appropriate, the withdrawal of that document. The issuing institution shall reconsider the grounds for issuing the document and, if necessary, withdraw it. (3) Pursuant to paragraph 2, where there is doubt about the information provided by the persons concerned, the validity of a document or supporting evidence or the accuracy of the facts on which the particulars contained therein are based, the institution of the place of stay or residence shall, insofar as this is possible, at the request of the competent institution, proceed to the necessary verification of this information or document. (4) Where no agreement is reached between the institutions concerned, the matter may be brought before the Administrative Commission by the competent authorities no earlier than one month following the date on which the institution that received the document submitted its request. The Administrative Commission shall endeavour to reconcile the points of view within six months of the date on which the matter was brought before it. Article 89 Reg. No. 987/2009 Information (1) The Administrative Commission shall prepare the information needed to ensure that the parties concerned are aware of their rights and the administrative formalities required in order to assert them. This information shall, where possible, be disseminated electronically via publication online on sites accessible to the public. The Administrative Commission shall ensure that the information is regularly updated and monitor the quality of services provided to customers. (2) The Advisory Committee referred to in Article 75 of the basic Regulation may issue opinions and recommendations on improving the information and its dissemination. (3) The competent authorities shall ensure that their institutions are aware of and apply all the Community provisions, legislative or otherwise, including the decisions of the Administrative Commission, in the areas covered by and within the terms of the basic Regulation and the implementing Regulation.

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Article 76 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Principle of sincere cooperation- Impact on national law . . . . . . . . . . . 2. Mutual communication between Member States (Article 76(1)) . . . 3. Mutual administrative assistance (Article 76(2)). . . . . . . . . . . . . . . . . . . . . 4. Direct contact between authorities and institutions and with persons involved (Article 76(3)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Mutual obligation of information and cooperation between institutions and persons involved (Article 76(4) and (5)). . . . . . . . . . . . . . . . . . . 6. Interpretation difficulties and differences of views between institutions. Binding effect of documents (Article 76(6)). . . . . . . . . . . . . . . . . . . 7. Acceptance of applications and documents written in an official language of another Member State (Article 76(7)). . . . . . . . . . . . . . . . . . .

1 2 2 4 6 9 13 16 20

I. Spirit and Purpose

The rather technical and often complex provisions contained in the regula- 1 tions on the coordination of social security systems are to be implemented by the authorities and institutions of Member States. This is possible only if there is a smooth and effective cooperation and communication between the authorities and competent institutions of the various Member States. Art. 76 lays down the principles for such cooperation and communication. In addition, this provision emphasizes the need for institutions to provide active assistance to citizens in enforcing their rights under these regulations. A key aspect of this assistance is the provision of information about their rights and obligations. The duty to provide information is mutual. Art. 76 stipulates explicitly that citizens have the obligation to inform the competent institutions about any change in their personal or family situation which might affect their right to benefits under the regulations. II. Commentary 1. Principle of sincere cooperation- Impact on national law

The leading principle for the process of mutual cooperation between Member 2 States is that of sincere cooperation within the meaning of Art. 4(3) TEU. It is true that in the absence of harmonization at Union level, Member States are free to determine their social security schemes, in terms both of content and procedure. However, when exercising this power, Member States must comply with Union law (Case C-120/95, Decker, EU:C:1998:167). This means that the authorities who are involved in the implementation of the social security regulations (institutions, liaison bodies, competent authorities, courts) must respect not only the provisions laid down in the regulations, but also the requirements derived directly from the Treaty. The Court will not hesitate to examine whether in a specific case the application of provisions of national law is compatible with provisions of the Treaty. One of the Treaty provisions is Art. 4(3) TEU laying down the principle of sincere cooperation. By virtue of that principle Member

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States have the duty to take all appropriate measures to ensure fulfilment of the obligations arising out of Union law. It follows from the case law of the Court that this duty is incumbent on all authorities in the Member States, including the courts (Case 106/89, Marleasing, EU:C:1990:395). This principle can have far-reaching consequences. It may happen, for instance, that the application of national legislation to a migrant worker in the same way as to a non-migrant worker gives rise to unforeseen consequences which are incompatible with the aims of Art. 45-48 TFEU. In such cases the principle of sincere cooperation requires the authorities of the Member States to use all the means at their disposal to achieve the aim of freedom of movement established in Art. 45-48 TFEU. This requirement implies that these authorities, when applying national law, should interpret it, as far as it is possible, in a way which accords with the requirements of Union law. Where application in accordance with those requirements is not possible, the national authorities must fully apply Union law, if necessary by not applying national law (Case C-262/97, Engelbrecht, EU:C:2000:492). 3 The principle of sincere cooperation within the meaning of Art. 4(3) TEU may also affect the application of national procedural rules in situations falling within the scope of Union law (Case 61/79, Denkavit, EU:C:1980:100). For such situations, the principle of sincere cooperation results in the requirement that national authorities, when applying the national procedural rules must respect the principles of equivalence and of effectiveness (Cases C-231/96, Edis, EU:C:1998:401 and C-34/02, Pasquini, EU:2003:366). The principle of equivalence means that the procedural rules governing cross-border situations must not be less favorable than those governing purely internal situations. In accordance with the principle of effectiveness, those procedural rules must not render virtually impossible or excessively difficult the exercise of rights conferred by Union law. The latter principle means, for instance, that a time limit foreseen by national legislation for bringing proceedings, should be, in cross-border situations, at least of such a duration that rights conferred by Union law can be effectively exercised (Case C-255/00, Grundig Italiana, EU:C:2002:525). 2. Mutual communication between Member States (Article 76(1)) 4

By virtue of Art. 76(1)(b) the competent authorities of the Member States have to inform each other of all information regarding changes in their legislation which may affect the implementation of the regulations. In order to respect this obligation Member States, having changed or planning to change their national legislation, send in notes to the Administrative Commission. In one of the subsequent meetings the other Member States as well as the secretariat can raise questions about the possible impact the changes might have on migrant workers. Changes in national legislation can lead to modifications of the regulations, such as updating the list of “special non-contributory benefits” in Annex X or deleting or updating entries in Annex XI. 450

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The extent of the obligation laid down in Art. 76(1)(a), namely the duty of 5 Member States to inform each other of all “measures taken to implement this regulation” is not very clear and could be interpreted in different ways. In practice, this provision is a dead letter. 3. Mutual administrative assistance (Article 76(2))

For the purposes of the regulations, the institution or authority of a Member 6 State can request the relevant institution or authority of another Member State to lend its good office. In such cases, the requested institution or authority must act as though implementing its own legislation. Such administrative assistance is daily practice. It might happen, for instance that a person works in Member State A for an employer established in Member State B. This person is subject to the legislation of Member State A. In order to determine the level of the contributions due, the institution of Member State A needs information about the salary paid to the worker by the employer. The institution of Member State A can then request administrative assistance from the institution of Member State B. If in accordance with the legislation of the Member State B this institution can obtain information about the salary from the employer in order to determine the level of contributions due under its own legislation, it will lend its good office to the institution of Member State A. In order to know the salary paid to the worker by the employer, the institution of Member State A may also contact the employer established in Member State B directly (Art. 76(3)). The obligation of mutual administrative assistance within the meaning of Art. 76(2) covers only social security institutions and authorities competent in the field of social security. The obligation of mutual administrative assistance presupposes that an insti- 7 tution of a Member State cannot act itself in another Member State, but has to request the institution of the other Member State to do it on its behalf. There are some exceptions to this rule, such as the cases foreseen by Art. 34(3) and 27(6) IR, and the possibility to contact persons, such as employers, in another Member State directly, in accordance with Art. 76(3) (see below). It seems that some Member States, in view of preventing abuse, do act themselves in other Member States in cases not foreseen by the regulations, such as administrative or medical checks on beneficiaries residing or staying in another Member State carried out by teams posted there by the institution of the competent Member State. It is doubtful whether this practice is compatible with Union law (Case C-279/97, Voeten and Beckers, EU:C:1998:599). As a rule the administrative assistance given in accordance with Art. 76(2) is 8 free of charge. Until now the Administrative Commission has not made use of its mandate to establish the nature of reimbursable expenses and the limits above which their reimbursement is due (Art. 76(2) third sentence). Art. 85 IR confirms that the free of charge rule also applies to the mutual administrative assistance given in the framework of cross-border recovery (see commentary Rob Cornelissen

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Art. 84). As an exception to the principle of free of charge mutual assistance, Art. 87(6) IR stipulates that the effective amount of medical examinations and administrative checks carried out by the requested institution have to be reimbursed by the institution having requested these examinations and checks. 4. Direct contact between authorities and institutions and with persons involved (Article 76(3))

In accordance with Art. 76(3) the authorities of the Member States may, for the purposes of the regulation, communicate directly with each other. This means that they are not obliged to contact consular posts or diplomatic missions, as usual in international law. Direct contact is possible not only for the authorities but also for institutions. They are not obliged to contact the liaison bodies within the meaning of Art. 1(2)(b) IR. However, reimbursements between institutions of the Member States must always be made via the liaison bodies (Art. 66(2) IR). In addition, when an institution does not know exactly which institution of the other Member State is competent for a specific case, it has to find it out via the liaison bodies. 10 As to direct contacts between institutions, Art. 2(2) IR imposes the obligation to provide or exchange without delay all data necessary for establishing and determining the rights and obligations of the persons concerned. In principle the transmission of data has to be carried out by electronic means (Art. 4(2) IR; see commentary Art. 78). 11 Art. 76(3) enables the authorities and institutions of the Member States to contact directly the persons involved in another Member State. A person, for instance, having claimed a pension in two or more Member States may be approached directly by an institution of another Member State for supplementary information needed for determining his/her pension rights. 12 The main principles governing contacts between institutions or authorities and persons involved are laid down in Art. 2(1) IR. The wording of this provision reflects an amendment made by Parliament. It stipulates that such contacts should be based on the principles of public service, efficiency, active assistance, rapid delivery and accessibility, including e-accessibility, in particular for the disabled and the elderly. When dealing with the persons concerned the authorities or institutions have to respect not only the specific requirements laid down in Art. 2(1) IR, but also those developed by the Court on the basis of the principles of Union law, such as the obligation of Member States to make good loss and damage caused to individuals by breaches of Union law for which the States can be held responsible (joined Cases 6/90 and 9/90, Frankovich, EU:C: 1991:428). In other cases the principle of sincere cooperation within the meaning of Art. 4(3) TEU could impose on institutions an obligation to review decisions (Case C- 453/00, Kühne, EU:C:2004:17). The requirement of judicial control of any decision of a national authority also reflects a general principle of Union law (Case C-226/99, Siples, EU:C:2001:14). 9

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5. Mutual obligation of information and cooperation between institutions and persons involved (Article 76(4) and (5))

In accordance with Art. 76(4) the institutions and persons concerned have a 13 duty of mutual information and cooperation to ensure the correct implementation of the regulations. In accordance with the principle of good administration, the institutions have to respond to all queries “within a reasonable period of time”. During the negotiations on this provision, attempts were made to impose on institutions a specific deadline for replying. However, such a deadline was considered to go beyond the limits of coordination. The institutions also have the duty to provide the persons concerned with any information required for exercising their rights under the regulations. In addition, where it is necessary for the application of the regulations, the institutions must issue documents to the persons concerned (Art. 3(4) IR), the so-called portable documents (see commentary Art. 72). Notification of decisions. By virtue of Art. 3(4) IR, the relevant institution 14 must notify the claimant residing or staying in another Member State of its decision directly or through the liaison body of the Member State of residence. A copy of the decision must be sent to other institutions involved. The obligation to notify decisions to the insured person and to other institutions is also contained in a number of special rules such as Art. 27(9) IR. Art. 3(4) IR contains another important administrative principle by stipulating that the institution, when refusing the benefits, has to indicate the reasons for refusal, the remedies and periods allowed for appeals. One could argue that such requirements go beyond the limits of coordination. However, it is important to keep in mind that according to settled case law the principle of effective judicial protection is a general principle of Union law (Case C-432/05, Ubinet, EU:C: 2007:163). The persons concerned too have obligations. On their own initiative, they 15 have to inform the institutions of the competent Member State and of the Member State of residence as soon as possible of any change in their personal or family situation which affects their right to benefits under the regulations. “Changes in personal and family situation” cover a wide range of things. Receiving additional income, for instance, could have an impact on the entitlement to “special non-contributory benefits” within the meaning of Art. 70. Taking up an additional job could have an impact on the determination of the applicable legislation in accordance with Art. 11-16 or could lead to the end of entitlement to unemployment benefits. In accordance with Art. 76(5), failure to respect the obligation of information by the person concerned may result in the application of proportionate measures in accordance with national law. The notion “measures” refers in particular to administrative penalties. In accordance with Art. 76(5) last sentence, when it applies such penalties, the institution concerned must respect the principles of equivalence and of effectiveness. As said before (point I) the

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principles of equivalence and of effectiveness are general principles of Union law. Further details concerning the information obligations for the persons concerned are contained in Art. 3(2) IR.

6. Interpretation difficulties and differences of views between institutions. Binding effect of documents (Article 76(6))

In accordance with Art. 76(6), the persons concerned should not be the victim of disputes between institutions concerning the interpretation or application of the regulations. On the contrary, in such situations, the institutions concerned have to contact each other in order to find a solution. If they cannot find a solution within a reasonable period, the institutions concerned have to refer the matter to their authorities, in practice the members representing the Member States concerned in the Administrative Commission. If these authorities are not able to find a solution between themselves either, they may call on the Administrative Commission. 17 Special rules are contained in Art. 5, 6, 16 and 60 IR, governing the procedures to follow in case of interpretation problems or differences of views between institutions in some specific areas, such as disputes about validity of documents, provisional application of legislation or determination of applicable legislation for people working in two or more Member States. The Administrative Commission has set up a Conciliation Board and has established a dialogue and conciliation procedure (see commentary Art. 72). 18 Art. 5 IR, dealing with the legal value of documents issued in another Member State, is very much inspired by the case law of the Court, according to which the institutions and judiciary of the host State are in principle bound by the portable document A1 issued by the institution of the sending State (see commentary Art. 72). This case law about the legal value of portable document A1 and the relevant dialogue and conciliation procedure is extended by Art. 5 IR to all documents and supporting evidence on the basis of which the documents have been issued. The notion of “document” is very wide indeed. By virtue of Art. 1(1(c) IR it means a set of data, irrespective of the medium used, structured in such a way that it can be exchanged electronically and which must be communicated in order to enable the operation of the regulations. 19 Art. 5 IR is of importance not only for documents issued by an institution of another Member State, but also for supporting evidence on the basis of which the documents have been issued. This means, for instance, that a birth certificate issued by an authority of a Member State necessary to support a pension claim, in principle binds the institutions and judiciary of other Member States, even when they have serious doubts about the accuracy of that birth certificate. In case of doubts about the accuracy of that certificate, the latter institutions only have the option to launch the dialogue procedure, and if necessary, the conciliation procedure within the meaning of Art. 5(2),(3)and(4) IR and Decision A1 of 16

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the Administrative Commission. In this way, Art. 5 IR goes further than the case law of the Court under the old Reg. No. 1408/71. In fact, in its 1997 judgment in Case C-336/94 (Dafeki, EU:C:1997:579), the Court ruled that the institutions and judiciary of a Member State were not bound by certificates with regard to personal status issued by the authorities of another Member State, if the accuracy of those certificates was seriously undermined by concrete evidence relating to the individual case in question. 7. Acceptance of applications and documents written in an official language of another Member State (Article 76(7))

By virtue of Art. 76(7) the authorities, institutions and tribunals of one Mem- 20 ber State may not reject applications or other documents submitted to them on the grounds that they are written in an official language of another Member State. If follows from the case law of the Court that this provision can only be invoked by persons falling within the scope of the regulations. In addition, this provision only relates to the procedures for the implementation of the regulations, and thus to the exclusion of other disputes in which a person may possibly be involved (Case 55/77, Maris, EU:C:1977:203). The residence or nationality of the person concerned does not play a role. However, the provision does not apply to situations which are confined in all respects within a single Member State (Case C-153/91, Petit, EU:C:1992:354). A French speaking Belgian, for instance, who has spent his whole career in Belgium, and who resides in Flanders, cannot invoke this provision to use the French language in procedures in which he contests decisions of a Belgian social security institution before Belgian courts. In some very specific situations the right to use your own language in rela- 21 tions with authorities, institutions or tribunals of other Member States, follows not only from Art. 76(7), but also from the principle of equal treatment within the meaning of Art. 18 TFEU. Some Member States, for instance, confer on their nationals whose native language is a language other than the principal language of that Member State and who reside in a defined region of that Member State, the right to use their native language in relations with the judicial and administrative authorities based in that region. The German speaking minority residing in the northern part of Italy (Süd-Tirol) has been given such right by the Italian legislature. It follows from the principle of equal treatment that not only German speaking Italian nationals living in Süd-Tirol have this right, but also nationals of other Member States who live in another Member State and whose mother tongue is German (Case C-274/96, Bickel and Franz, EU:C:1998:563). Union law, including Art. 76(7), does not apply to “situations which are con- 22 fined in all respects within a single Member State”. A Belgian national who has always lived and worked in Belgium and who is involved in a procedure with a Belgian social security institution before a Belgian court, is clearly in a purely internal situation. However, if this Belgian national has, in the course of his caRob Cornelissen

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reer, also worked or lived in another Member State, this situation is no longer a purely internal one, even if he is involved in a procedure against a Belgian institution before a Belgian court (Case C-212/06, Walloon government v. Flemish government, EU:C:2008:178). Art. 76(7) does not require that the language which the person wants to use is the official language of the Member State of which he/she is a national. A Slovenian speaking Austrian national, for instance, may use his mother tongue in his relations with institutions of another Member State.

Article 77 Protection of personal data (1) Where, according to this Regulation or to the Implementing Regulation, the authorities or institutions of a Member State communicate personal data to the authorities or institutions of another Member State, such communication shall be subject to the data protection legislation of the Member State transmitting them. Any communication from the authority or institution of the receiving Member State as well as the storage, alteration and destruction of the data provided by that Member State shall be subject to the data protection legislation of the receiving Member State. (2) Data required for the application of this Regulation and the Implementing Regulation shall be transmitted by one Member State to another Member State in accordance with Community provisions on the protection of natural persons with regard to the processing and free movement of personal data. Article 3 Reg. No. 987/2009 Scope and rules for exchanges between the persons concerned and institutions (1) (see under Art. 87) (2) (see under Art. 76) (3) When collecting, transmitting or processing personal data pursuant to their legislation for the purposes of implementing the basic Regulation, Member States shall ensure that the persons concerned are able to exercise fully their rights regarding personal data protection, in accordance with Community provisions on the protection of individuals with regard to the processing of personal data and the free movement of such data. (4) (see under Art. 76)

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Determination of applicable legislation on data protection (Article 77(1)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Substance of data protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose 1

In order to implement the regulations, Member States’ social security institutions have to exchange between themselves a lot of information, including personal data of the persons concerned. Progress made in information technology has made the processing and exchange of such data considerably easier. In order to guarantee that personal data are processed fairly and in accordance with the purposes for which they are communicated, Art. 77 provides rules on the protection of personal data.

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II. Commentary 1. Determination of applicable legislation on data protection (Article 77(1))

Art. 77(1) determines which data protection legislation is applicable in case of 2 communication of personal data to authorities or institutions of another Member State for the purposes of the implementation of the regulations. Where, for the purposes of the social security regulations, authorities or institutions transmit personal data to the authorities or institutions of another Member State, the data protection legislation of the sending State is applicable. The data protection legislation of the receiving State is applicable for any transmission of the received data to another body as well as for the storage, alteration of destruction of personal data. These rules determining the applicable data protection legislation correspond to the rules previously laid down in Art. 84(5)(a) of the old Reg. No. 1408/71, inserted in that regulation by Reg. No. 2332/89 (O.J. L. 224 of 2 August 1989).

2. Substance of data protection

The modest material rule on data protection previously laid down in 3 Art. 84(5)(b) of Reg. No. 1408/71 has become superfluous after the entry into force of Directive 95/46/EC of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data. Art. 77(2) stipulates that the transmission of personal data between Member States for the purposes of the social security regulations, has to be in accordance with the Union rules on the protection of personal data. Implicitly it refers to the aforementioned Directive. The rule laid down in Art. 3(3) IR is actually superfluous, since it does not add anything to the aforementioned Directive. Reference to the 1995 Directive is also made in Art. 78(2) and (4). The objective of the 1995 Directive on data protection is not to create obsta- 4 cles for the exchange of information between social security institutions. On the contrary, the objective of the Directive is to remove obstacles to flows of personal data by harmonizing the protection offered by national legislation on the rights and freedoms of individuals with regard to the processing of personal data (recitals 1-9 of the Directive). For this reason, Art. 1(2) of the Directive stipulates that Member States shall neither restrict nor prohibit the free flow of personal data between Member States for reasons connected with the protection of fundamental rights and freedoms of natural persons. The Directive is very much inspired by the case law of the ECHR, in particular concerning Art. 8 of the European Convention of Human Rights.

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Article 78 Data processing (1) Member States shall progressively use new technologies for the exchange, access and processing of the data required to apply this Regulation and the Implementing Regulation. The European Commission shall lend its support to activities of common interest as soon as the Member States have established such data-processing services. (2) Each Member State shall be responsible for managing its own part of the data-processing services in accordance with the Community provisions on the protection of natural persons with regard to the processing and the free movement of personal data. (3) An electronic document sent or issued by an institution in conformity with this Regulation and the Implementing Regulation may not be rejected by any authority or institution of another Member State on the grounds that it was received by electronic means, once the receiving institution has declared that it can receive electronic documents. Reproduction and recording of such documents shall be presumed to be a correct and accurate reproduction of the original document or representation of the information it relates to, unless there is proof to the contrary. (4) An electronic document shall be considered valid if the computer system on which the document is recorded contains the safeguards necessary in order to prevent any alteration, disclosure or unauthorised access to the recording. It shall at any time be possible to reproduce the recorded information in an immediately readable form. When an electronic document is transferred from one social security institution to another, appropriate security measures shall be taken in accordance with the Community provisions on the protection of natural persons with regard to the processing and the free movement of personal data. Article 1 Reg. No. 987/2009 Definitions (1) For the purposes of this Regulation: (a) basic Regulation’ means Regulation (EC) No 883/2004; (b) implementing Regulation’ means this Regulation; and (c) the definitions set out in the basic Regulation shall apply. (2) In addition to the definitions referred to in paragraph 1, (a) access point’ means an entity providing: (i) an electronic contact point; (ii) automatic routing based on the address; and (iii) intelligent routing based on software that enables automatic checking and routing (for example, an artificial intelligence application) and/or human intervention; (b) liaison body’ means any body designated by the competent authority of a Member State for one or more of the branches of social security referred to in Article 3 of the basic Regulation to respond to requests for information and assistance for the purposes of the application of the basic Regulation and the implementing Regulation and which has to fulfil the tasks assigned to it under Title IV of the implementing Regulation; (c) document’ means a set of data, irrespective of the medium used, structured in such a way that it can be exchanged electronically and which must be communicated in order to enable the operation of the basic Regulation and the implementing Regulation; (d) Structured Electronic Document’ means any structured document in a format designed for the electronic exchange of information between Member States; (e) transmission by electronic means’ means the transmission of data using electronic equipment for the processing (including digital compression) of data and employing wires, radio transmission, optical technologies or any other electromagnetic means; (f) Audit Board’ means the body referred to in Article 74 of the basic Regulation. Article 4 Reg. No. 987/2009 Format and method of exchanging data (1) The Administrative Commission shall lay down the structure, content, format and detailed arrangements for exchange of documents and structured electronic documents. (2) The transmission of data between the institutions or the liaison bodies shall be carried out by electronic means either directly or indirectly through the access points under a common secure framework that can guarantee the confidentiality and protection of exchanges of data.

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Article 78 (3) In their communications with the persons concerned, the relevant institutions shall use the arrangements appropriate to each case, and favour the use of electronic means as far as possible. The Administrative Commission shall lay down the practical arrangements for sending information, documents or decisions by electronic means to the person concerned. Article 88 Reg. No. 987/2009 Notifications (1) The Member States shall notify the European Commission of the details of the bodies defined in Article 1(m), (q) and (r) of the basic Regulation and Article 1(2)(a) and (b) of the implementing Regulation, and of the institutions designated in accordance with the implementing Regulation. (2) The bodies specified in paragraph 1 shall be provided with an electronic identity in the form of an identification code and electronic address. (3) The Administrative Commission shall establish the structure, content and detailed arrangements, including the common format and model, for notification of the details specified in paragraph 1. (4) Annex 4 to the implementing Regulation gives details of the public database containing the information specified in paragraph 1. The database shall be established and managed by the European Commission. The Member States shall, however, be responsible for the input of their own national contact information into this database. Moreover, the Member States shall ensure the accuracy of the input of the national contact information required under paragraph 1. (5) The Member States shall be responsible for keeping the information specified in paragraph 1 up to date. Article 95 Reg. No. 987/2009 Transitional period for electronic data exchanges (1) Each Member State may benefit from a transitional period for exchanging data by electronic means as provided for by Article 4(2) of the implementing Regulation. These transitional periods shall not exceed 24 months from the date of entry into force of the implementing Regulation. However, if the delivery of the necessary Community infrastructure (Electronic Exchange of Social Security information — EESSI) is significantly delayed with regard to the entry into force of the implementing Regulation, the Administrative Commission may agree on any appropriate extension of these periods. (2) The practical arrangements for any necessary transitional periods referred to in paragraph 1 shall be laid down by the Administrative Commission with a view to ensuring the necessary data exchange for the application of the basic Regulation and the implementing Regulation. Annex 4 Reg. No. 987/2009 Details of the database referred to in Article 88(4) of the implementing Regulation (1) Content of the database An electronic directory (URL) of the bodies concerned shall indicate: (a) the names of the bodies in the official language(s) of the Member State as well as in English (b) the identification code and the EESSI electronic addressing (c) their function in respect of the definitions in Article 1(m), (q) and (r) of the basic Regulation and Article 1(a) and (b) of the implementing Regulation (d) their competence as regards the different risks, types of benefits, schemes and geographical coverage (e) which part of the basic Regulation the bodies are applying (f) the following contact details: postal address, telephone, telefax, e-mail address and the relevant URL address (g) any other information necessary for the application of the basic Regulation or the implementing Regulation. (2) Administration of the database (a) The electronic directory is hosted in EESSI at the level of the European Commission. (b) Member States are responsible for collecting and checking the necessary information of bodies and for the timely submission to the European Commission of any entry or change of the entries falling under their responsibility. (3) Access Information used for operational and administrative purposes is not accessible to the public. (4) Security All modifications to the database (insert, update, delete) shall be logged. Prior to accessing the Directory for the purposes of modifying entries, users shall be identified and authenticated. Prior to any attempt of a modification of an entry, the user’s authorisation to perform this action will be checked. Any unauthorised action shall be rejected and logged. (5) Language Regime The general language regime of the database is English. The name of bodies and their contact details should also be inserted in the official language(s) of the Member State.

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Part 2: Regulation (EC) No 883/2004 I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Important definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Document and structured electronic document (SED). . . . . . . . . . . . b) Access point-Liaison body . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) List of institutions – Electronic Directory . . . . . . . . . . . . . . . . . . . . . . . . . d) European architecture of EESSI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Legal framework for electronic data exchange and new technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Communication with persons concerned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Legal value of electronic data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Transition to EESSI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose 1

Under Reg. No. 1408/71 the use of paper forms was the norm in the exchange of information between Member States' social security institutions. The current regulations, however, require that the transmission of data is carried out, after a transitional period, by electronic means. Art. 78 and Art. 1, 4, 88 and 95 and Annex 4 IR provide the necessary legal framework for such exchange. The electronic exchange of data constitutes one of the major innovations of the new implementing regulation, but it is also a rather complex system that enables such exchange at technical and administrative level. II. Commentary 1. Important definitions a) Document and structured electronic document (SED)

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In accordance with Art. 1(2)(c) IR, a "document" is the universal carrier by which data are exchanged for the implementation of the social security regulations. This means that the "documents" replace the E-forms, previously used under Reg. No. 1408/71. The information on the document must be structured in such a way that it can be exchanged electronically. In order to enable an exchange by electronic means the document must be transformed into a "structured electronic document" (SED) within the meaning of Art. 1(2)(d) IR. To this end the formats established by the Administrative Commission must be used (see commentary Art. 72(e)). The SED contains not only the data necessary for the identification of the sending and the receiving institution and of the person concerned, but, of course, also all the other details necessary for the overall business process. However, not all data are exchanged only by electronic means. The content and format of the so-called "portable documents" (see commentary Art. 72(e)) have been determined by the Administrative Commission.

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b) Access point-Liaison body

By virtue of Art. 4(2) IR the electronic exchange of data between institutions may be carried out either directly or indirectly through access points. When it decided the main features of the European architecture of EESSI, the Administrative Commission opted for the latter way. This means that all exchange of information between Member States' social security institutions must be carried out through access points. In accordance with Art. 1(2)(a) IR, an “access point” is a kind of bridge between national and European fields over which all SED's must be sent. It means that the access point must have an electronic address and, as a "machine", be capable of forwarding SED's to the final destination either automatically (in cases where the address provided by the sending institution is complete and correct) or with the help of software (enabling the identification of the institution which is meant to receive the SED). The Administrative Commission has decided that every Member State may have between one and five access points. The “access point” is where the national electronic architecture (national part of access point) and the European electronic architecture (EESSI) meet each other. The Union is competent for the European architecture. To this end the Commission has elaborated a reference implementation that has been made available to the Member States for free. The obligation to exchange by electronic means applies only in the relations between (access points of) Member States. The social security regulations do not interfere in the internal process within a single Member State. The "access point" should not be confused with "liaison body" within the meaning of Art. 1(2)b) IR, even when in several Member States the "liaison body" also has the function of "access point". The "liaison body" is any body of a Member State which responds, by means of the institutions it represents, to requests for information (by citizens) or assistance (by other Member States) and which deals with the reimbursement of costs between Member States (see commentary Art. 74 and Art. 76(3))

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c) List of institutions – Electronic Directory

Under Reg. No. 1408/71 and 574/72, the various bodies, authorities and insti- 7 tutions involved in the implementation of the regulations were listed in several annexes to Reg. No. 574/72. In order to keep these lists more or less up to date, these annexes were adapted on a yearly basis by a Commission regulation after the unanimous opinion of the Administrative Commission had been obtained. Under the current regulations, these bodies and institutions are listed in a public database, the so-called electronic directory. All these bodies and institutions are provided with an electronic identity in the form of an identification code and electronic address (Art. 88(2) IR). This means that every institution has its own code. The electronic Directory also indicates the name and telephone number of

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the bodies and institutions, as well as their competence as regards the different risks, types of benefits, schemes and geographical coverage (Annex 4(1) IR). The data base can be consulted both by the bodies or institutions themselves and by the general public. In fact, citizens should know which body or institution to contact in order to enforce their rights under the regulations. The data base is available on the website of the Commission. 8 The data base is hosted in EESSI and managed by the European Commission. However, Member States are responsible for the input of their own national information into this database. In addition, Member States must ensure the accuracy of the input of the national contact information. Member States are also responsible for keeping the national information up to date. In order to make the system of electronic exchange of data as a whole a success, not only a uniform structure of the database, but also a continuous update of the electronic Directory is indispensable. Therefore, Article 88(3) IR charges the Administrative Commission with the task to establish further details of the electronic directory. In its Decision E2 (O.J. C 187 of 10 July 2010), the Administrative Commission established a “change management procedure”, which ensures that changes in the data listed in the electronic directory are processed in a structured, consistent, auditable and timely way. d) European architecture of EESSI 9

EESSI stands for Electronic Exchange of Social Security Information. As said before, the Administrative Commission has decided that electronic exchange of data is carried out through access points. This means that messages are sent by the access point of one Member State via the Coordination Node to the access point of the other Member State. The EESSI system consists of: – an electronic directory (see above point 1.3) – a central application (Coordination Node), hosted at the European Commission, which will ensure the inter-country distribution of messages between Member States – a reference application to be provided to Member States for deployment in the national administrations enabling these administrations to be linked to the system.

The European Commission is responsible for the common EU infrastructure, whereas Member States will have to take the necessary steps in order to be connected to the whole system and to develop, where necessary, their country specific applications. Together these applications will enable Member States' institutions to manage the exchange of social security information by electronic means across the 32 States involved, including Iceland, Norway, Liechtenstein and Switzerland. 11 Member States (and not the Commission) are responsible for the transmitted data. This means that SED's cannot be opened at Union level (Coordination 10

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Node). Each Member State is responsible for managing its own part of the data processing services. In doing so, Member States have to take into account the requirements of the 1995 Directive on data protection (Art. 78(2)). The EU's own private network (s-TESTA), isolated from the internet, guarantees a secure and confidential information exchange between Member States (Art. 4(2) IR). 2. Legal framework for electronic data exchange and new technologies

The difference in wording between, on the one hand Art. 78, and on the other 12 hand Art. 4(2) IR is striking. Art. 78 of the basic regulation, adopted in 2004, does not require the use of electronic means. It only encourages Member States to use “progressively” new technologies for the exchange and processing of data. On the contrary, Art. 4(2) IR, adopted in 2009, requires the use of electronic means for the exchange of data. However, no further elements for electronic exchange of data (concerning objectives or characteristics) are given by the IR. The task to determine the structure, content, and detailed arrangements for such exchange has been passed on to the Administrative Commission (Art. 4(1) IR). The Administrative Commission has discharged its duty by deciding, among other things, about the European architecture of EESSI, the governance of EESSI (see commentary Art. 72(d)) and the business process, as well as by approving a series of SED’s. Given the strong wording of Art. 4(2) IR, Member States no longer have the 13 option to exchange data by paper. An exception exists, however, for the transitional period in accordance with Art. 95 IR, during which several means of communication can be used (see below point 5) as well as for possible emergences, e.g. breakdown of the electronic system. The IR does not actually decide how the transmission by electronic means has to take place, given the very broad definition laid down in its Art. 1(2(e). According to this definition, even sending a fax would constitute a transmission by electronic means. The decisions taken by the Administrative Commission have, fortunately, brought the necessary clarifications. In order to meet current requirements, the regulations have to take into ac- 14 count the rapid technological developments. The question arises whether it would not be more appropriate to modify the legal framework in such a way that the basic regulation requires exchange of data by electronic means and that the regulations (and not the Administrative Commission) lay down the objectives and main characteristics for electronic data transmission. The wording of the regulations should be such that it also includes online data exchange as well as the use of other modern communication tools. Online data exchange could not only contribute to the process leading to the ‘electrification’ of the EHIC (see commentary Art. 72 e), but also be a major asset in the fight against fraud and abuse (e.g. enabling immediate checking whether a “posted worker” is actually insured in the sending State), whereas the use of modern communication tools (e.g. smartphones or mobile phones) could facilitate life for citizens. Rob Cornelissen

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3. Communication with persons concerned 15

In accordance with Art. 4(3) IR the institutions must use, in their communications with the persons concerned, the arrangements “appropriate to each case”. As far as possible the use of electronic means should be favored. Obviously, in all cases the Union provisions on data protection should be respected (see commentary Art. 77). At the moment the Administrative Commission has not yet laid down the practical arrangements for sending information, documents and decisions by electronic means to the persons concerned, as foreseen by Art. 4(3) IR. 4. Legal value of electronic data

Art. 78(3) stipulates that an electronic document sent by the institution of a Member State may not be rejected by any institution of another Member State on the grounds that it was received by electronic means. This is, however, subject to the condition that the receiving institution has declared that it can receive electronic documents. This condition can only be explained by the fact that in 2004 (date of adopting of Reg. No. 883/2004) the IR was not yet adopted. Art. 4(2) IR requires the use of electronic means for transmission of data between institutions. This means that the condition laid down in Art. 78(3) only remains relevant during the transitional period within the meaning of Art. 95 IR. 17 Art. 78(3) further clarifies that reproduction and recording of electronic documents shall be presumed to be a correct and accurate reproduction of the original document or representation of the information to which it relates, unless there is proof to the contrary. The question arises of what is to be understood by the notion “proof of the contrary”. It refers mainly to technical problems (e.g. by printing out an SED some figures have disappeared or have become unreadable). However, this provision does not allow questioning of the content of an SED which has been transmitted by electronic means. For this question only Art. 5 IR is relevant (see commentary on Art. 76(6)). 18 Art. 78(4) clarifies under which conditions an electronic document is to be considered valid. In the first place the electronic system on which the document is recorded should contain the necessary security safeguards as well as the safeguards concerning the protection of personal data. This condition speaks for itself since all Member States are obliged to respect Union law on the protection of personal data (see commentary Art. 77). In the second place it must be possible that an electronically transmitted SED be reproduced in a readable form in the receiving Member State. EESSI will meet all these conditions. 16

5. Transition to EESSI 19

The shift from paper to electronic data exchange has required and continues to require intense preparatory work (see commentary Art. 72 d). The necessary

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preparations do not only concern technical matters (such as the required hardware and software), but also includes training of the staff of the institutions. Therefore, Art. 95 IR provides for a transitional period of 24 months from 1 May 2010 (date of entry into force of the IR) to allow Member States to implement and integrate national infrastructure for exchanging data by electronic means. Art. 95(1) IR empowers the Administrative Commission to agree on an extension of the transitional period for Member States if the delivery of the central infrastructure is significantly delayed. In its Decision E3 (O.J. C 12 of 14 January 2012, p.6) the Administrative Commission decided in 2011 to extend the transitional period until 30 April 2014. Early 2014 the Administrative Commission conducted an overall assessment of the project, both at EU and national levels, based on the analysis from the European Commission and EESSI Executive Board. According to this assessment, a further extension of the transitional period was considered to be necessary in order to ensure the effective implementation of the EESSI system. Considering the technical complexity of the project, the Administrative Commission decided in its Decision E4 (O.J. C 152 of 20 May 2014, p.21) to further extend the transitional period. The final date of the transitional period has now been set on 2 years from the date when the central EESSI system is developed, tested and delivered into production, ready for Member States to start the integration to the central system. During the extended transitional period, Decision E1, adopted in 2009, con- 20 tinues to be relevant. This decision concerns the practical arrangements for the transitional period for the data exchange by electronic means (O.J. C 106 of 24 April 2010, p. 9). During the transitional period, the guiding principle should be that of good cooperation between institutions, pragmatism and flexibility. Above all, the need to guarantee a seamless transition for citizens exercising their rights under the regulations is paramount. As from 1 May 2010 (date when the current regulations became applicable) paper versions of the Structured Electronic Documents (SED’s) have replaced the old E-forms based on Reg. No. 1408/71 and 574/72. In accordance with Art. 1(2)(d) IR, “Structured Electronic Document” means any structured document in a format designed for the electronic exchange of information between Member States. However, Member States that have national electronic applications which produce E-forms or that have electronic exchanges in place, may continue to use them during the transitional period. The reason for this exception is to avoid Member States who already have electronic exchanges in place, being forced to make a step back or to face disproportionately high expenses. Of course, the rights of the citizens under the regulations should always be guaranteed. During the transitional period the institutions must accept relevant information on any document issued by another institution, even if it is based on an outdated format, content or structure. In case of doubts concerning the rights of the citizen concerned, the institution must contact the issuing institution in the spirit of good cooperation.

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Each Member State may follow a flexible phased approach, sector by sector, in implementing EESSI, as it becomes ‘EESSI enabled’ via its access points (see above under 1.2). A Member State may also choose to join EESSI only when all its sectors are ‘enabled’. Being ‘EESSI-enabled’ means that the sector /access point concerned can both send and receive all messages in that sector to and from other Member States’ access points. 22 One of the main deliveries of the EESSI project became immediately operational on 1 May 2010, namely the electronic directory (see above 1.c). 21

Article 79 Funding of activities in the social security field In connection with this Regulation and the Implementing Regulation, the European Commission may fund in full or in part: (a) activities aimed at improving exchanges of information between the social security authorities and institutions of the Member States, particularly the electronic exchange of data; (b) any other activity aimed at providing information to the persons covered by this Regulation and their representatives about the rights and obligations deriving from this Regulation, using the most appropriate means.

This provision offers the Commission the possibility to fund activities aimed at either improving exchanges of information between institutions (in particular the electronic exchange of data) or at improving information to the citizens about their rights and obligations deriving from the regulations. 2 On the basis of this provision the Commission has, following calls for proposals, financed a number of: – transnational actions for cooperation between social security institutions and for improving citizens' knowledge on their rights and obligations deriving from the regulations (such as conferences, round tables, training initiatives, seminars and workshops, setting up of networks, exchange of public servants between institutions, exchange of best practices and experiences of coordination) – transnational actions for preparing and implementing the EESSI project (such as actions aimed at exchange of best practices, of knowledge, of expertise and of experiences with the implementation of EESSI; reinforcement of technical capacity; bilateral testing and training) – national actions for preparing and implementing EESSI (such as adjustments of national IT systems for EESSI purposes, testing at national level, support and reinforcement of administrative capacity, knowledge dissemination and training) 1

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Article 80 Exemptions (1) Any exemption from or reduction of taxes, stamp duty, notarial or registration fees provided for under the legislation of one Member State in respect of certificates or documents required to be produced in application of the legislation of that Member State shall be extended to similar certificates or documents required to be produced in application of the legislation of another Member State or of this Regulation. (2) All statements, documents and certificates of any kind whatsoever required to be produced in application of this Regulation shall be exempt from authentication by diplomatic or consular authorities.

I. Spirit and Purpose

In order to facilitate the enforcement of citizens’ rights deriving from the reg- 1 ulations, Art. 80 provides for two exemptions from possible taxes which could be imposed when documents have to be produced in one Member State for the institution of another Member State. Exemptions from, or reductions of fees must be extended. Documents to be produced are exempt from authentication by diplomatic or consular authorities. II. Commentary

The wording of Art. 80(1), corresponding to Art. 85(1) of the old Reg. No. 2 1408/71, speaks for itself. When Member State A provides for exemption from fees in respect of documents to be produced in application of that Member State, this exemption is extended to similar documents to be produced in application of the legislation of Member State B. The last part of the sentence of Art. 80(1) refers to documents to be produced in application of the legislation of another Member State "or of this Regulation", i.e. Reg. No. 883/2004. However, it follows from the spirit of Art. 80(1) that it should also apply to documents to be produced in application of the IR. By virtue of Art. 80(2) (corresponding to Art. 85(2) of the old Reg. No. 3 1408/71) all statements, documents and certificates produced in application of the regulations are exempt from authentication by diplomatic or consular authorities. This provision has to be seen in the context of other provisions in Reg. No. 883/2004 concerning sincere cooperation between institutions and simplification of procedures aimed at helping the citizens concerned to enforce their rights. The assumption of correctness effectuated by Art. 80(2) only concerns the authenticity of the document (e.g. with respect to the competences of the body having issued the document), but not the content of the document. The latter matter is the subject of Art. 5 IR (see commentary Art. 76).

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Article 81 Claims, declarations or appeals Any claim, declaration or appeal which should have been submitted, in application of the legislation of one Member State, within a specified period to an authority, institution or tribunal of that Member State shall be admissible if it is submitted within the same period to a corresponding authority, institution or tribunal of another Member State. In such a case the authority, institution or tribunal receiving the claim, declaration or appeal shall forward it without delay to the competent authority, institution or tribunal of the former Member State either directly or through the competent authorities of the Member States concerned. The date on which such claims, declarations or appeals were submitted to the authority, institution or tribunal of the second Member State shall be considered as the date of their submission to the competent authority, institution or tribunal. Article 2 Reg. No. 987/2009 Scope and rules for exchanges between institutions (1) (see under Art. 76) (2) (see under Art. 76) (3) Where a person has mistakenly submitted information, documents or claims to an institution in the territory of a Member State other than that in which the institution designated in accordance with the implementing Regulation is situated, the information, documents or claims shall be resubmitted without delay by the former institution to the institution designated in accordance with the implementing Regulation, indicating the date on which they were initially submitted. That date shall be binding on the latter institution. Member State institutions shall not, however, be held liable, or be deemed to have taken a decision by virtue of their failure to act as a result of the late transmission of information, documents or claims by other Member States’ institutions. (4) Where data are transferred indirectly via the liaison body of the Member State of destination, time limits for responding to claims shall start from the date when that liaison body received the claim, as if it had been received by the institution in that Member State.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Respect of deadlines notwithstanding submission to wrong body . . 2. Erroneous contacts with a non-competent institution in another Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Indirect transmission via liaison bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose 1

Member States' social security systems differ substantially from each other. This is true in particular for the administrative and institutional organization of these systems and the rules of competence of the various bodies and institutions. People who have made use of their right to free movement may have difficulties in finding the right body or institution in one of the Member States in which they have worked or resided, in order to enforce their rights deriving from the regulations. The objective of Art. 81, completed by Art. 2(3)and(4) IR, is to avoid citizens being penalized for having submitted their claims or appeals to the wrong body due to lack of knowledge about the repartition of competences.

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II. Commentary 1. Respect of deadlines notwithstanding submission to wrong body

Art. 81, which corresponds to Art. 86(1) of the old Reg. No. 1408/71, applies 2 to all claims, declarations or appeals which, by virtue of the legislation of a Member State, have to be submitted within a time limit. The protection offered by this provision is important in particular for appeals, since these are generally admissible only if they are submitted within a specific time limit after the decision in question has been issued. Art. 81 stipulates in the first place that a submission is also possible to a “corresponding” authority, institution or tribunal of another Member State. The question arises as to which bodies Art. 81 refers. What does the word “corresponding” actually mean? If by virtue of the legislation of a Member State an appeal against a decision of an institution has to be submitted to a tribunal, does Article 81 require that a submission is possible only to a tribunal, but not to an administrative body or institution of another Member State? This could lead to problems if, under the legislation of the other Member State, such appeals should be submitted to an administrative body and not to a tribunal. The distinction between administrative and judicial authorities is in several Member States not clear-cut and may induce a certain confusion in the minds of mobile citizens. Therefore, the Court has in its judgment in Case 40/74 (Costers and Vounckx, EU:C:1974:132) opted for a generous interpretation of the word “corresponding”. According to this judgment, even if the legislation of a Member State requires that an appeal against a decision of an institution must be submitted to a tribunal, it is possible to submit an appeal against that decision to an administrative body of another Member State. True, this judgment concerned the interpretation of Art. 47 of the very old Reg. No. 3, but there is not much difference in wording between the two provisions. Art. 47 of Reg. No. 3 spoke about “authority, institution or other corresponding agency of another Member State” instead of “corresponding authority, institution or tribunal of another Member State ” (However, the German version of Art. 81 differs from other linguistic versions by using three times the word “corresponding”: “…if it is submitted to a corresponding authority, a corresponding institution or a corresponding tribunal”) Strictly speaking the reference to “authority” in Art. 81 is superfluous, given 3 the definition of the term “institution” laid down in Art. 1 (p), which also includes “authority”. Also a municipality where by virtue of national law a pension can be claimed, is an “institution” within the meaning of Art. 1(p), since it is responsible for applying a part of the social security legislation. It is interesting to mention that Art. 81 does not require that the person who 4 submits a claim to an authority, institution or tribunal of another Member State has a specific connection with that State. Neither does Art. 81 require that the person concerned has “mistakenly” submitted the claim in another Member State. Can a person who has worked in Member States A and B and who lives in Rob Cornelissen

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Member State B submit a claim for a pension from Member States A and/or B in Member State C, a State with which he has no connection at all? The wording of Art. 81 seems to allow it. However, in its Costers and Vounckx judgment (Case 40/74, EU:C:1974:132) the Court has on this point interpreted Art. 47 of Reg. No. 3 (corresponding to the current Art. 81) in a restrictive way by ruling that it covers only a person who lives in a Member State other than that whose law has to be applied. The question arises as to whether the person concerned must really reside in the Member State where the claim is submitted or whether such a submission is also possible during a temporary stay in another Member State. At the end of the day, Art. 81 is a particular expression of the general provision concerning the assimilation of facts and events contained in Art. 5(b). In any case, if the competent Member State has clear indications that the claim has been submitted in the other Member State only in order to obtain a legal position, which would not have been possible had the claim be submitted to the competent body of the competent Member State, it could invoke its national legislation aimed at avoiding abuse. In this context it is appropriate to mention that, contrary to cases governed by Art. 2(3) IR, Art. 81 does not contain a safeguard which ensures that any delay in transmission to the competent institution does not automatically result in decisions ‘taken by default’ (see below under 2). 5 A body, to which the claim, declaration or appeal has been submitted must forward it without delay to the competent body. The transmission has to take place either directly or through the competent authorities of the Member State concerned (in cases where the final addressee is not known). This involvement of the competent authorities does not actually fit well in the arrangements for administrative cooperation. In fact, when an institution does not know exactly which institution of the other Member State is competent for a specific case, it has to find it out via the liaison bodies, by virtue of Art. 2(2) IR (see commentary Art. 76(3)) and not via the competent authorities. The body receiving the claim, declaration or appeal in the non-competent Member State does not have the power to adjudicate upon its admissibility under the legislation of the competent body. It is for the latter to decide whether the claim or appeal has been submitted in time or not (judgment in Case 143/79, Walsh, EU:C:1980:134). 6 The date on which the claim, declaration or appeal was submitted to the body of the non-competent Member State has to be considered as the date of its submission to the competent body. If, for instance, by virtue of the legislation of a Member State an appeal against a decision of an institution has to be submitted within a time limit of two months after the date of that decision, such appeal can be submitted till the last day of this period of two months to the "corresponding" body of another Member State. However, Art. 81 determines only the date on which the claim or appeal is deemed to have been made to the competent body. It does not extend to the substantive rules applicable in the matter (judgment in Case 92/81, Caracciolo, EU:C:1982:219).

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There are also some special rules laid down in the regulation or IR providing 7 for an assimilation of submissions of claims for specific benefits, such as Art. 68(3) concerning family benefits or Art. 45 IR concerning pensions. These special rules have priority over the general provision of Art. 81. By virtue of Art. 45(3) IR, for instance, the date of submission of a pension claim in one Member State has to be considered as the date of claim submitted to the institutions of all Member States where the person has been insured. 2. Erroneous contacts with a non-competent institution in another Member State

Art. 81 is complemented by special rules laid down in Art. 2(3) IR. In accor- 8 dance with the latter provision, information, documents or claims which were submitted by mistake to an institution of the non-competent Member State have to be forwarded by that institution to the competent institution of the other Member State. Contrary to Art. 81, Art. 2(3) IR only applies to documents or claims submitted to an institution. It does not apply to documents submitted to a tribunal. Another important difference is that the document or claim must have been submitted to the institution of the non-competent Member State by mistake. A deliberate submission to the institution of the Member State of residence, so that this institution would forward the document to the competent institution of the other Member State, is not covered by Art. 2(3) IR. The institution, to which the document or claim has been submitted by mis- 9 take, has to indicate the date of submission and then resubmit it without delay to the competent institution of the other Member State. The date of initial submission is binding for the latter institution. However, by virtue of Art. 2(3) last sentence IR, any delay in the transmission should not have detrimental results for the competent institution. A lack of reaction from the competent institution because the claim has arrived with considerable delay, cannot be deemed to mean an acceptance of the claim. Let us take as an example a request for authorization for planned health care in another Member State. Such a request must be submitted to the institution of the Member State of residence if the person does not reside in the competent Member State. The institution of the Member State of residence must forward the request without delay to the competent institution (see commentary Art. 20). If in such cases, the competent institution does not reply within the deadlines set by its legislation, the authorization shall be deemed to have been granted by the competent institution by virtue of Art. 26(2), last sentence IR. However, if the person concerned does not follow the relevant rules and sends the request for such authorization by mistake to the institution of the Member State where the treatment is planned, and that institution forwards the request with a considerable delay to the competent institution, the assumption of a positive decision if the competent institution does not reply in time, does not apply. In such cases, the deadlines set by the legislation of the competent institu-

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tion will start to run only at the date on which the competent institution received the claim. 10 The last sentence of Art. 2(3) IR is missing in Art. 81. This could be interpreted as meaning that in cases covered by Art. 81, the competent institution may be held liable or be deemed to have taken a decision 'by default' if it has not taken a decision within the deadlines set by its legislation, even when such failure is the result of a late transmission by the institution of the non- competent Member State to which the claim was initially submitted. 3. Indirect transmission via liaison bodies 11

Art. 2(4) IR provides that where data are transferred indirectly via the liaison body of the Member State of destination, time limits for responding to claims start to run from the date when that liaison body received the claim, as if it had been received by the institution in that Member State. It is not really clear which cases are covered by this rule. Art. 81 applies to all claims, declarations and appeals submitted by a person (regardless of the motivation) in a non-competent Member State. Art. 2(3) IR applies to all information, documents and claims which have been submitted mistakenly by a person in a non-competent Member State. For all these cases the date of initial submission is binding for the competent institution. The date of arrival at the liaison body of the competent Member State, referred to in Art. 2(4) IR, is always later than the date of initial submission in the non-competent Member State and is therefore less favourable for the person concerned. So which cases could then be covered by Art. 2(4) IR? It could refer to (probably very rare) cases where a person who knows which Member State is competent but who not knowing which the precise competent institution is, sends his data (including a claim) to the liaison body of the competent Member State. It could also refer to cases where data are exchanged indirectly between institutions (e.g. in the framework of a procedure to award pensions). Unlike Art. 81 and Art. 2(3) IR, Art. 2(4) IR does not provide for a general assimilation of dates of submission for all time limits, but only for time limits for responding to claims.

Article 82 Medical examinations Medical examinations provided for by the legislation of one Member State may be carried out at the request of the competent institution, in another Member State, by the institution of the place of residence or stay of the claimant or the person entitled to benefits, under the conditions laid down in the Implementing Regulation or agreed between the competent authorities of the Member States concerned. Article 87 Reg. No. 987/2009 Medical examination and administrative checks (1) Without prejudice to other provisions, where a recipient or a claimant of benefits, or a member of his family, is staying or residing within the territory of a Member State other than that in which the debtor institution is located, the medical examination shall be carried out, at the request of that institution, by the institu-

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Article 82 tion of the beneficiary’s place of stay or residence in accordance with the procedures laid down by the legislation applied by that institution. The debtor institution shall inform the institution of the place of stay or residence of any special requirements, if necessary, to be followed and points to be covered by the medical examination. (2) The institution of the place of stay or residence shall forward a report to the debtor institution that requested the medical examination. This institution shall be bound by the findings of the institution of the place of stay or residence. The debtor institution shall reserve the right to have the beneficiary examined by a doctor of its choice. However, the beneficiary may be asked to return to the Member State of the debtor institution only if he or she is able to make the journey without prejudice to his health and the cost of travel and accommodation is paid for by the debtor institution. (3) Where a recipient or a claimant of benefits, or a member of his family, is staying or residing in the territory of a Member State other than that in which the debtor institution is located, the administrative check shall, at the request of the debtor institution, be performed by the institution of the beneficiary’s place of stay or residence. Paragraph 2 shall also apply in this case. (4) Paragraphs 2 and 3 shall also apply in determining or checking the state of dependence of a recipient or a claimant of the long-term care benefits mentioned in Article 34 of the basic Regulation. (5) The competent authorities or competent institutions of two or more Member States may agree specific provisions and procedures to improve fully or partly the labour-market readiness of claimants and recipients and their participation in any schemes or programmes available in the Member State of stay or residence for that purpose. (6) As an exception to the principle of free-of-charge mutual administrative cooperation in Article 76(2) of the basic Regulation, the effective amount of the expenses of the checks referred to in paragraphs 1 to 5 shall be refunded to the institution which was requested to carry them out by the debtor institution which requested them.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Medical examinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Administrative checks and determination of state of dependency . . 3. Activation measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose

The legislation of all Member States requires that a person who claims or who 1 wishes to retain entitlement to some specific benefits undergoes medical examination and/or administrative checks. When the person concerned lives or stays in a Member State other than the competent State, it is necessary that assistance be provided by the institution of the Member State of residence or stay. II. Commentary 1. Medical examinations

Art. 82, corresponding to Art. 87 of the old Reg. No. 1408/71, lays down the 2 principle that, at the request of the competent institution, medical examinations have to be carried out by the institution of the Member State of residence or stay of the person concerned. Art. 87 IR provides complementary rules for medical examinations which go far beyond the rules provided by Art. 115 of the old Reg. No. 574/72. Medical examinations are common practice in particular for invalidity benefits, sickness benefits, long term care benefits, benefits in respect of accidents at work and family benefits (increased amounts for disabled children).

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Special rules are provided for specific examinations in several branches which have to be applied by priority, such as Art. 27 IR (sickness benefits) on the examination whether or not a person is unable to work, Art. 28 IR (long term care benefits) on the examination concerning the degree of dependency and Art. 49 IR on the examination concerning the degree of invalidity. 3 Where a recipient or claimant of benefits resides or stays in a Member State other than the competent State, the competent (debtor) institution has, by virtue of Art. 87(1) IR, to send a request for medical examination to the institution of the Member State of stay or residence. Member States have to clearly indicate in the electronic directory (see commentary Art. 78 point 1.3) which institutions are to be considered as the institution of the place of stay or residence. The medical examination will be carried out in accordance with the "procedures" laid down by the legislation of the Member State of stay or residence. Since Art. 87(1) IR refers to "procedures" and not to "legislation" within the meaning of Art. 1(l), this provision could also cover issues outside the field of social security, such as liability of doctors, data protection or information duties in cases of transmittable diseases. The competent institution must inform the institution of the place of stay or residence of any special requirements to be followed and of any points to be covered by the medical examination. 4 By virtue of Art. 87(2) IR the requested institution must send a report to the competent institution about the findings of its medical examination. In accordance with the principle of sincere cooperation between institutions, the competent institution is bound by the findings of the institution of the place of stay or residence. The horizontal principle of sincere cooperation between institutions (see commentary Art. 76, point 1) is also expressed in other provisions (such as Art. 5 IR about the legal value of documents and supporting evidence) and in particular, in Art. 27(8) IR, about the certificate of incapacity for work. This means, for instance, that when a competent institution requests the institution of the place of stay or residence to carry out a medical examination of children for whom an increased amount of family benefits has been claimed, the competent institution is bound by the findings of the report of the requested institution according to which the children are indeed disabled. 5 If the competent institution wants to avoid the binding effect of the findings of the institution of the place of stay or residence, it can decide to have the person examined by a doctor of its own choice. This may happen in the place of stay or residence. However, if such examination has to be carried out in the competent Member State, this is possible only if the person concerned is able to make the journey without impairment to his health, and if the travel and subsistence expenses are borne by the competent institution. In this way, Art. 87(2) second sentence IR codifies the two important elements of the Court's judgment in Case C-344/89 (Martinez Vidal, EU:C:1991:277) on Art. 51 of the old Reg. No. 574/72, namely fitness to travel and payment of expenses. According to the

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latter provision, the examination had to take place in the Member State of stay or residence, whereas the competent institution could decide for an additional examination by a doctor of its own choice. Art. 51 of Reg. No. 574/72 was silent about the place in which the additional examination by the doctor chosen by the competent institution was to be carried out (conclusions of the AdvocateGeneral in Case C-279/97, Voeten and Beckers, EU:C: 1998:386). The Court ruled that under Art. 51 of Reg. No. 574/72 the option to waive a prior examination by the institution of the place of stay or residence was possible only if it was accompanied by minimum guarantees, namely that it was both freely made and unambiguous (Case C-279/97, Voeten and Beckers, EU:C:1998:599). The question arises as to whether this case law is still valid under the current regulations. True, contrary to Art. 51 of Reg. No. 574/72, Art. 87(2) IR explicitly says that the examination by the doctor chosen by the institution may take place in the competent Member State, provided that some conditions are fulfilled (fitness to travel and payment of expenses). However, the intention of the legislature, namely to create a real choice for the competent institution (either an examination by the institution of place of residence or by a doctor of its own choice) is not clearly reflected in the wording of Art. 87(1) and (2). In fact, the wording of Art. 87(2) second sentence ("The debtor institution shall reserve the right to have the beneficiary examined by a doctor of its own choice") is very similar indeed to the last sentence of Art. 51(1) of the old Reg. No. 574/72. In accordance with Art. 87(6) IR the effective amount of the expenses of the 6 medical examination must be refunded to the requested institution. This constitutes an exception to the free-of-charge rule for mutual administrative assistance (see commentary Art. 76(2)). It is not really clear what is to be understood by "the effective amount of the expenses". This term certainly covers the expenses for external doctors, easily identifiable in the accounts of the institution of the place of stay or residence. The principles for identifying expenses concerning sickness, maternity and paternity benefits are laid down in Art. 62 IR. The wording used in Art. 62 IR on the one hand, and Art. 87(6) IR on the other hand, differs in some (e.g. German and French) versions, suggesting that the word "expenses" referred to in Art. 87(6) IR might cover a wider field than the word "expenses" within the meaning of Art. 62 IR, including for instance internal administration costs directly linked to the assistance delivered. Contrary to other provisions concerning reimbursements of costs, such as Art. 35(3) or Art. 85(2) IR, Art. 87(6) IR does not stipulate explicitly that two or more Member States may provide for other methods of reimbursements (e.g. reimbursement by fixed amounts) or waive all reimbursements. Nevertheless this issue could be covered by Art. 9 IR according to which two or more Member States may agree procedures other than those provided for by the IR. The additional provisions on reimbursements of costs laid down in Title IV chapters 1 and 2 IR (in particular deadlines for introduction and settlement of claims and interests on late pay-

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ments) do not apply for claims of the institutions of the place of stay or residence based on Art. 87(6). 7 The question arises as to whether it is appropriate that only the requesting institution always has to bear the costs. Medical examinations made for the determination of the degree of invalidity in accordance with Art. 49(2) IR, for instance, could be of interest to both Member States in which periods of insurance had been completed. The practice shows that often in such cases where medical examinations are also of interest to the institution of the place of residence, no reimbursements are made. However, if it is clear from the outset that in the Member State of residence no entitlement exists (e.g. the required periods of insurance are not completed, even when periods completed in other Member States are aggregated), the medical examination is exclusively of interest for the requesting institution which thus has to bear all the costs. 2. Administrative checks and determination of state of dependency

The principles for medical examinations also apply to administrative checks (Art. 87(3)IR), e.g. to determine whether a person who resides in a Member State other than the competent State is living alone or shares a household with somebody else. This means that administrative checks can be carried out either by the institution of the place of stay or residence, or by a body chosen by the competent institution in either the Member State of stay or residence, or in the competent Member State, provided that the travel and subsistence expenses are borne by the competent institution. Here too, special rules exist for specific benefits which have to be applied by priority, such as Art. 55(4) IR concerning unemployment benefits which continue to be granted by virtue of Art. 64 during a temporary stay of the beneficiary in a Member State other than the competent State. 9 The same principles also apply for examinations to determine or to check the state of dependency of a recipient or a claimant of long term care benefits. On this point, Article 87(4) IR converges with the rules laid down in Art. 28(2)and(3) IR. The added value of the latter provisions as special rules is therefore questionable. The co-existence of Art. 87(4) IR and Art. 28(2)and(3) IR can only be explained by the fact that Art. 87 IR was dealt with at the very end of the negotiations leading to the adoption of the IR and that at that stage it was very difficult to reopen the negotiations of already closed chapters. 8

3. Activation measures 10

Art. 87(5) IR is a rather new provision that corresponds to the fact that since for more than a decade, several Member States have taken a series of measures to stimulate non-active people to re-integrate into the labour market. These activation measures can take different forms, such as programs to help people in acquiring new skills and upgrade existing ones, and all kind of incentives for unemployed people to find and accept work. The traditional rules of the regula476

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tions stipulate that all kinds of benefits have to be exported (e.g. Art. 7 for cash benefits such as invalidity benefits or Art. 64, within certain limits, for unemployment benefits). However, benefits in kind are not exportable (with the exception of family benefits, Art. 1(z)). This means that the overwhelming majority of activation measures aimed at re-integrating unemployed or disabled people into the labour market or at improving their employability and adaptability are not exportable. This can lead to problems in cross-border situations when the legislation of a Member State makes the entitlement to benefits subject to the condition of participating in activation measures. The social/economic objectives of the Member States concerned would be frustrated if cross-border beneficiaries of such benefits were exempt from the obligation to participate to activation measures. Art. 87(5) IR makes it possible that the authorities or institutions of the Mem- 11 ber States concerned conclude an agreement so that the beneficiaries can participate in corresponding schemes or programs available in the Member State of stay or residence. According to the letter of Art. 87(5) IR such agreements may be concluded between the "competent" authorities or the "competent" institutions of two or more Member States. The use of the term "competent institutions" is actually not correct, since the institution in the Member State of stay or residence is not a "competent" one, because the beneficiary is not insured there (Art. 1(q)). Such agreements between the authorities or institutions could also include a reimbursement of costs. In fact, without such agreement a reimbursement of costs would not be possible given the ‘free-of-charge’ rule for administrative assistance (see commentary Art. 76(2)). The exception to the free-ofcharge rule foreseen by Art. 87(6) IR does not apply here, since it only refers to expenses of "checks" and not of "schemes or programs". It is very likely that agreements within the meaning of Art. 87(5) IR will be concluded only if the legislation of both the competent Member State and the State of residence provides for activation measures. In fact, if for a beneficiary of invalidity benefits no activation measures exist in the competent Member State, why would this State be bothered to ask the institution of the State of residence for a participation of the beneficiary in a re-integration program available in that State? On the other hand, if the Member State of residence does not have activation measures, it will not be possible for that State to offer a beneficiary of a benefit from another Member State any participation in a re-integration scheme or program. In this context it is important to mention the special rule laid down for Den- 12 mark in Annex XI point 3. It stipulates that the temporary unemployment benefits (flexible job scheme) are to be paid to beneficiaries outside Denmark by virtue of Art. 64 or 65 only if the Member State of stay or residence has similar employment schemes. Could it be deduced from this provision that all other Member States have to export their benefits, even when in the Member State of stay or residence no additional activation measures can be offered? The reply to this question depends on the systematic approach of the national legislation conRob Cornelissen

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cerned. If indeed the national legislation makes the entitlement to a benefit explicitly subject to the condition of participation to activation measures (such as in Denmark), then also under Reg. No. 883/2004 export of this benefit should only be possible if the Member State of residence offers similar measures (Art. 87(5) IR can be a helpful tool in this respect). However, if participation in activation measures is only encouraged by national legislation and not an absolute condition for entitlement to the benefit, then the benefit should be exported even when in the Member State of residence participation in activation measures is not possible. This problematic illustrates one of the greatest gaps of the EU regulations, namely the lack of provisions and certainty concerning activation measures (about the need to modify the EU regulations on this point, see: Maximilian Fuchs: "The implementation of coordination Regulations in active labour market policy provisions at national level" in: "50 years of social security coordination-Past-Present-Future", 2009 and the 2012 trESS thematic report: “The coordination of benefits with activation measures”)

Article 83 Implementation of legislation Special provisions for implementing the legislation of certain Member States are referred to in Annex XI.

I. Spirit and Purpose 1

Art. 83 constitutes the legal basis for special provisions included in Annex XI which are necessary for the implementation of the regulation in order to take into account the particularities of the various social security schemes of Member States. The provisions contained in Annex XI are part of the regulation and are therefore adopted via the procedures foreseen by Art. 48 TFEU. The purpose of each entry in Annex XI is to ensure that the regulation can be smoothly applied in the Member State concerned. II. Commentary

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The provisions laid down in Annex XI are based on requests by Member States. An in-depth check was carried out by the Commission and also by the other Member States in Council and by Parliament during the negotiations - to ensure that restrictions in comparison with the general rules of the regulation are not disproportionate and that the fundamental principles of the regulation are not undermined. It was also important to ensure that similar problems were solved in the same manner. The content of the overwhelming majority of entries in Annex XI was not determined during the negotiations leading to the adoption of Reg. No. 883/2004 due to lack of time. But obvi478

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Article 84 ously the content of these entries had to be determined before the date of application of that regulation. Therefore, the content of Annex XI was inserted by Reg. No. 988/2009 (O.J. L 284 of 30 October 2009), which was adopted on the same day as the IR.

The number of entries in Annex XI has dropped substantially in comparison 4 with Annex VI of the old Reg. No. 1408/71. This has been possible by finding a uniform solution in either the Regulation or IR for horizontal problems rather than all kinds of similar entries in Annex XI. For this reason Reg. No. 988/2009 amended Reg. No. 883/2004 even before it had become applicable (e.g. Art. 3(5), 14(4),51(3),52(5) and 56(1)).

Article 84 Collection of contributions and recovery of benefits (1) Collection of contributions due to an institution of one Member State and recovery of benefits provided by the institution of one Member State but not due may be effected in another Member State in accordance with the procedures and with the guarantees and privileges applicable to the collection of contributions due to the corresponding institution of the latter Member State and the recovery of benefits provided by it but not due. (2) Enforceable decisions of the judicial and administrative authorities relating to the collection of contributions, interest and any other charges or to the recovery of benefits provided but not due under the legislation of one Member State shall be recognised and enforced at the request of the competent institution in another Member State within the limits and in accordance with the procedures laid down by the legislation and any other procedures applicable to similar decisions of the latter Member State. Such decisions shall be declared enforceable in that Member State in so far as the legislation and any other procedures of that Member State so require. (3) Claims of an institution of one Member State shall in enforcement, bankruptcy or settlement proceedings in another Member State enjoy the same privileges as the legislation of the latter Member State accords to claims of the same kind. (4) The procedure for implementing this Article, including costs reimbursement, shall be governed by the Implementing Regulation or, where necessary and as a complementary measure, by means of agreements between Member States. Chapter III of Title IV Reg. No. 987/2009 Recovery of benefits provided but not due, recovery of provisional payments and contributions, offsetting and assistance with recovery Section 1 Principles Article 71 Common provisions For the purposes of applying Article 84 of the basic Regulation and within the framework defined therein, the recovery of claims shall, wherever possible, be by way of offsetting either between the institutions of Member States concerned, or vis-à-vis the natural or legal person concerned in accordance with Articles 72 to 74 of the implementing Regulation. If it is not possible to recover all or any of the claim via this offsetting procedure, the remainder of the amount due shall be recovered in accordance with Articles 75 to 85 of the implementing Regulation. Section 2 Offsetting Article 72 Benefits received unduly (1) If the institution of a Member State has paid undue benefits to a person, that institution may, within the terms and limits laid down in the legislation it applies, request the institution of any other Member State responsible for paying benefits to the person concerned to deduct the undue amount from arrears or on-going payments owed to the person concerned regardless of the social security branch under which the benefit is paid. The institution of the latter Member State shall deduct the amount concerned subject to the conditions and limits applying to this kind of offsetting procedure in accordance with the legislation it applies in the

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Part 2: Regulation (EC) No 883/2004 same way as if it had made the overpayments itself, and shall transfer the amount deducted to the institution that has paid undue benefits. (2) By way of derogation from paragraph 1, if, when awarding or reviewing benefits in respect of invalidity benefits, old-age and survivors’ pensions pursuant to Chapter 4 and 5 of Title III of the basic Regulation, the institution of a Member State has paid to a person benefits of undue sum, that institution may request the institution of any other Member State responsible for the payment of corresponding benefits to the person concerned to deduct the amount overpaid from the arrears payable to the person concerned. After the latter institution has informed the institution that has paid an undue sum of these arrears, the institution which has paid the undue sum shall within two months communicate the amount of the undue sum. If the institution which is due to pay arrears receives that communication within the deadline it shall transfer the amount deducted to the institution which has paid undue sums. If the deadline expires, that institution shall without delay pay out the arrears to the person concerned. (3) If a person has received social welfare assistance in one Member State during a period in which he/she was entitled to benefits under the legislation of another Member State, the body which provided the assistance may, if it is legally entitled to reclaim the benefits due to the person concerned, request the institution of any other Member State responsible for paying benefits in favour of the person concerned to deduct the amount of assistance paid from the amounts which that Member State pays to the person concerned. This provision shall apply mutatis mutandis to any family member of a person concerned who has received assistance in the territory of a Member State during a period in which the insured person was entitled to benefits under the legislation of another Member State in respect of that family member. The institution of a Member State which has paid an undue amount of assistance shall send a statement of the amount due to the institution of the other Member State, which shall then deduct the amount, subject to the conditions and limits laid down for this kind of offsetting procedure in accordance with the legislation it applies, and transfer the amount without delay to the institution that has paid the undue amount. Article 73 Provisionally paid benefits in cash or contributions (1) For the purposes of applying Article 6 of the implementing Regulation, at the latest three months after the applicable legislation has been determined or the institution responsible for paying the benefits has been identified, the institution which provisionally paid the cash benefits shall draw up a statement of the amount provisionally paid and shall send it to the institution identified as being competent. The institution identified as being competent for paying the benefits shall deduct the amount due in respect of the provisional payment from the arrears of the corresponding benefits it owes to the person concerned and shall without delay transfer the amount deducted to the institution which provisionally paid the cash benefits. If the amount of provisionally paid benefits exceeds the amount of arrears, or if arrears do not exist, the institution identified as being competent shall deduct this amount from ongoing payments subject to the conditions and limits applying to this kind of offsetting procedure under the legislation it applies, and without delay transfer the amount deducted to the institution which provisionally paid the cash benefits. (2) The institution which has provisionally received contributions from a legal and/or natural person shall not reimburse the amounts in question to the person who paid them until it has ascertained from the institution identified as being competent the sums due to it under Article 6(4) of the implementing Regulation. Upon request of the institution identified as being competent, which shall be made at the latest three months after the applicable legislation has been determined, the institution that has provisionally received contributions shall transfer them to the institution identified as being competent for that period for the purpose of settling the situation concerning the contributions owed by the legal and/or natural person to it. The contributions transferred shall be retroactively deemed as having been paid to the institution identified as being competent. If the amount of provisionally paid contributions exceeds the amount the legal and/or natural person owes to the institution identified as being competent, the institution which provisionally received contributions shall reimburse the amount in excess to the legal and/or natural person concerned. Article 74 Costs related to offsetting No costs are payable where the debt is recovered via the offsetting procedure provided for in Articles 72 and 73 of the implementing Regulation. Section 3 Recovery Article 75 Definitions and common provisions (1) For the purposes of this Section: claim’ means all claims relating to contributions or to benefits paid or provided unduly, including interest, fines, administrative penalties and all other charges and costs connected with the claim in accordance with the legislation of the Member State making the claim; applicant party’ means, in respect of each Member State, any institution which makes a request for information, notification or recovery concerning a claim as defined above,

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Article 84 requested party’ means, in respect of each Member State, any institution to which a request for information, notification or recovery can be made, (2) Requests and any related communications between the Member States shall, in general, be addressed via designated institutions. (3) Practical implementation measures, including, among others, those related to Article 4 of the implementing Regulation and to setting a minimum threshold for the amounts for which a request for recovery can be made, shall be taken by the Administrative Commission. Article 76 Requests for information (1) At the request of the applicant party, the requested party shall provide any information which would be useful to the applicant party in the recovery of its claim. In order to obtain that information, the requested party shall make use of the powers provided for under the laws, regulations or administrative provisions applying to the recovery of similar claims arising in its own Member State. (2) The request for information shall indicate the name, last known address, and any other relevant information relating to the identification of the legal or natural person concerned to whom the information to be provided relates and the nature and amount of the claim in respect of which the request is made. (3) The requested party shall not be obliged to supply information: (a) which it would not be able to obtain for the purpose of recovering similar claims arising in its own Member State; (b) which would disclose any commercial, industrial or professional secrets; or (c) the disclosure of which would be liable to prejudice the security of or be contrary to the public policy of the Member State. (4) The requested party shall inform the applicant party of the grounds for refusing a request for information. Article 77 Notification (1) The requested party shall, at the request of the applicant party, and in accordance with the rules in force for the notification of similar instruments or decisions in its own Member State, notify the addressee of all instruments and decisions, including those of a judicial nature, which come from the Member State of the applicant party and which relate to a claim and/or to its recovery. (2) The request for notification shall indicate the name, address and any other relevant information relating to the identification of the addressee concerned to which the applicant party normally has access, the nature and the subject of the instrument or decision to be notified and, if necessary the name, address and any other relevant information relating to the identification of the debtor and the claim to which the instrument or decision relates, and any other useful information. (3) The requested party shall without delay inform the applicant party of the action taken on its request for notification and, particularly, of the date on which the decision or instrument was forwarded to the addressee. Article 78 Request for recovery (1) The request for recovery of a claim, addressed by the applicant party to the requested party, shall be accompanied by an official or certified copy of the instrument permitting its enforcement, issued in the Member State of the applicant party and, if appropriate, by the original or a certified copy of other documents necessary for recovery. (2) The applicant party may only make a request for recovery if: (a) the claim and/or the instrument permitting its enforcement are not contested in its own Member State, except in cases where the second subparagraph of Article 81(2) of the implementing Regulation is applied; (b) it has, in its own Member State, applied appropriate recovery procedures available to it on the basis of the instrument referred to in paragraph 1, and the measures taken will not result in the payment in full of the claim; (c) the period of limitation according to its own legislation has not expired. (3) The request for recovery shall indicate: (a) the name, address and any other relevant information relating to the identification of the natural or legal person concerned and/or to the third party holding his or her assets; (b) the name, address and any other relevant information relating to the identification of the applicant party; (c) a reference to the instrument permitting its enforcement, issued in the Member State of the applicant party; (d) the nature and amount of the claim, including the principal, the interest, fines, administrative penalties and all other charges and costs due indicated in the currencies of the Member States of the applicant and requested parties; (e) the date of notification of the instrument to the addressee by the applicant party and/or by the requested party;

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Part 2: Regulation (EC) No 883/2004 (f) the date from which and the period during which enforcement is possible under the laws in force in the Member State of the applicant party; (g) any other relevant information. (4) The request for recovery shall also contain a declaration by the applicant party confirming that the conditions laid down in paragraph 2 have been fulfilled. (5) The applicant party shall forward to the requesting party any relevant information relating to the matter which gave rise to the request for recovery, as soon as this comes to its knowledge. Article 79 Instrument permitting enforcement of the recovery (1) In accordance with Article 84(2) of the basic Regulation, the instrument permitting enforcement of the claim shall be directly recognised and treated automatically as an instrument permitting the enforcement of a claim of the Member State of the requested party. (2) Notwithstanding paragraph 1, the instrument permitting enforcement of the claim may, where appropriate and in accordance with the provisions in force in the Member State of the requested party, be accepted as, recognised as, supplemented with, or replaced by an instrument authorising enforcement in the territory of that Member State. Within three months of the date of receipt of the request for recovery, Member States shall endeavour to complete the acceptance, recognition, supplementing or replacement, except in cases where the third subparagraph of this paragraph applies. Member States may not refuse to complete these actions where the instrument permitting enforcement is properly drawn up. The requested party shall inform the applicant party of the grounds for exceeding the three-month period. If any of these actions should give rise to a dispute in connection with the claim and/or the instrument permitting enforcement issued by the applicant party, Article 81 of the implementing Regulation shall apply. Article 80 Payment arrangements and deadlines (1) Claims shall be recovered in the currency of the Member State of the requested party. The entire amount of the claim that is recovered by the requested party shall be remitted by the requested party to the applicant party. (2) The requested party may, where the laws, regulations or administrative provisions in force in its own Member State so permit, and after consulting the applicant party, allow the debtor time to pay or authorise payment by instalment. Any interest charged by the requested party in respect of such extra time to pay shall also be remitted to the applicant party. From the date on which the instrument permitting enforcement of the recovery of the claim has been directly recognised in accordance with Article 79(1) of the implementing Regulation, or accepted, recognised, supplemented or replaced in accordance with Article 79(2) of the implementing Regulation, interest shall be charged for late payment under the laws, regulations and administrative provisions in force in the Member State of the requested party and shall also be remitted to the applicant party. Article 81 Contestation concerning the claim or the instrument permitting enforcement of its recovery and contestation concerning enforcement measures (1) If, in the course of the recovery procedure, the claim and/or the instrument permitting its enforcement issued in the Member State of the applicant party are contested by an interested party, the action shall be brought by this party before the appropriate authorities of the Member State of the applicant party, in accordance with the laws in force in that Member State. The applicant party shall without delay notify the requested party of this action. The interested party may also inform the requested party of the action. (2) As soon as the requested party has received the notification or information referred to in paragraph 1 either from the applicant party or from the interested party, it shall suspend the enforcement procedure pending the decision of the appropriate authority in the matter, unless the applicant party requests otherwise in accordance with the second subparagraph of this paragraph. Should the requested party deem it necessary, and without prejudice to Article 84 of the implementing Regulation, it may take precautionary measures to guarantee recovery insofar as the laws or regulations in force in its own Member State allow such action for similar claims. Notwithstanding the first subparagraph, the applicant party may, in accordance with the laws, regulations and administrative practices in force in its own Member State, request the requested party to recover a contested claim, in so far as the relevant laws, regulations and administrative practices in force in the requested party’s Member State allow such action. If the result of the contestation is subsequently favourable to the debtor, the applicant party shall be liable for the reimbursement of any sums recovered, together with any compensation due, in accordance with the legislation in force in the requested party’s Member State. (3) Where the contestation concerns enforcement measures taken in the Member State of the requested party, the action shall be brought before the appropriate authority of that Member State in accordance with its laws and regulations. (4) Where the appropriate authority before which the action is brought in accordance with paragraph 1 is a judicial or administrative tribunal, the decision of that tribunal, insofar as it is favourable to the applicant

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Article 82 Limits applying to assistance (1) The requested party shall not be obliged: (a) to grant the assistance provided for in Articles 78 to 81 of the implementing Regulation if recovery of the claim would, because of the situation of the debtor, create serious economic or social difficulties in the Member State of the requested party, insofar as the laws, regulations or administrative practices in force in the Member State of the requested party allow such action for similar national claims; (b) to grant the assistance provided for in Articles 76 to 81 of the implementing Regulation, if the initial request under Articles 76 to 78 of the implementing Regulation applies to claims more than five years old, dating from the moment the instrument permitting the recovery was established in accordance with the laws, regulations or administrative practices in force in the Member State of the applicant party at the date of the request. However, if the claim or instrument is contested, the time limit begins from the moment that the Member State of the applicant party establishes that the claim or the enforcement order permitting recovery may no longer be contested. (2) The requested party shall inform the applicant party of the grounds for refusing a request for assistance. Article 83 Periods of limitation (1) Questions concerning periods of limitation shall be governed as follows: (a) by the laws in force in the Member State of the applicant party, insofar as they concern the claim and/or the instrument permitting its enforcement; and (b) by the laws in force in the Member State of the requested party, insofar as they concern enforcement measures in the requested Member State. Periods of limitation according to the laws in force in the Member State of the requested party shall start from the date of direct recognition or from the date of acceptance, recognition, supplementing or replacement in accordance with Article 79 of the implementing Regulation. (2) Steps taken in the recovery of claims by the requested party in pursuance of a request for assistance, which, if they had been carried out by the applicant party, would have had the effect of suspending or interrupting the period of limitation according to the laws in force in the Member State of the applicant party, shall be deemed to have been taken in the latter State, in so far as that effect is concerned. Article 84 Precautionary measures Upon reasoned request by the applicant party, the requested party shall take precautionary measures to ensure recovery of a claim in so far as the laws and regulations in force in the Member State of the requested party so permit. For the purposes of implementing the first paragraph, the provisions and procedures laid down in Articles 78, 79, 81 and 82 of the implementing Regulation shall apply mutatis mutandis. Article 85 Costs related to recovery (1) The requested party shall recover from the natural or legal person concerned and retain any costs linked to recovery which it incurs, in accordance with the laws and regulations of the Member State of the requested party that apply to similar claims. (2) Mutual assistance afforded under this Section shall, as a rule, be free of charge. However, where recovery poses a specific problem or concerns a very large amount in costs, the applicant and the requested parties may agree on reimbursement arrangements specific to the cases in question. (3) The Member State of the applicant party shall remain liable to the Member State of the requested party for any costs and any losses incurred as a result of actions held to be unfounded, as far as either the substance of the claim or the validity of the instrument issued by the applicant party is concerned. Article 86 Review clause (1) No later than the fourth full calendar year after the entry into force of the implementing Regulation, the Administrative Commission shall present a comparative report on the time limits set out in Article 67(2), (5) and (6) of the implementing Regulation. On the basis of this report, the European Commission may, as appropriate, submit proposals to review these time limits with the aim of reducing them in a significant way. (2) No later than the date referred to in paragraph 1, the Administrative Commission shall also assess the rules for conversion of periods set out in Article 13 with a view to simplifying those rules, if possible. (3) No later than 1 May 2015, the Administrative Commission shall present a report specifically assessing the application of Chapters I and III of Title IV of the implementing Regulation, in particular with regard to the procedures and time limits referred to in Article 67(2), (5) and (6) of the implementing Regulation and to the recovery procedures referred to in Articles 75 to 85 of the implementing Regulation.

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I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Offsetting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) International or cross-border national offsetting . . . . . . . . . . . . . . . . . b) Costs related to offsetting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Offsetting of provisionally paid benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Offsetting of provisionally paid contributions. . . . . . . . . . . . . . . . . . . . . e) General rules on offsetting in cases of unduly received benefits f) Offsetting in the field of pensions with arrears (outstanding amounts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g) Offsetting with social welfare assistance . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Requests for information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Recovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e) Review of the provisions concerning offsetting and recovery . . . .

1 2 2 5 5 7 8 13 19 23 27 31 31 38 39 40 48

I. Spirit and Purpose 1

The objective of Reg. No. 883/2004 is avoid people who make use of their right to free movement being penalized in the field of social security. To that end it lays down a number of provisions aimed at protecting these people. Thanks to these provisions many citizens can in cross-border situations claim rights which they would otherwise not have had. As a compensation to these numerous provisions, Art. 84 aims to protect the interests of the institutions and of the societies they represent by providing a legal framework for cross-border collection of contributions and for cross-border recovery of benefits which were unduly paid. Article 84 corresponds more or less to Art. 92 of the old Reg. No. 1408/71. However, the provisions on this issue contained in the IR go far beyond those which were previously laid down in Reg. No. 574/72. In fact, Reg. No. 574/72 only provided for some provisions on offsetting. Under the old regulations, a cross-border recovery of contributions or of unduly paid benefits was not possible without additional bilateral agreements concluded between the Member States concerned. The IR, on the contrary, has created a legal framework at Union level for cross-border recovery of contributions and of unduly paid benefits (Art. 75-85 IR). This is an important improvement in comparison with the past. However, it is a rather complex system and it is yet to be seen how apt it is for the field of social security (hence the evaluation clause of Art. 86(3)IR).

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II. Commentary 1. Principles

This part of both regulations contains several rules which apply both to the 2 collection of contributions and to the recovery of unduly paid benefits. However, where necessary, the rules vary according to the subject (collection of contributions or recovery of benefits). This part of the regulations also deals with different procedures and steps which have to be taken into account. Art. 71 IR contains a priority rule as to the way institutions can realize their 3 claims. Wherever possible, claims shall be effected by way of offsetting (section 2: Art. 72-74). If it is not possible to recover the claim via the offsetting procedure, then the claim must be effected by way of recovery (section 3: Art. 75-85). The priority given to offsetting has the advantage of having the least direct implications for the persons concerned, since the compensation takes place between the institutions. Only in the second place does a recovery according to Art. 75-85 come into consideration. Such a recovery has more direct implications for the persons concerned, since they have to pay back, for instance, amounts of money they had already received. The question arises as to whether this priority is to be respected under all circumstances. Let us take as an example an institution of Member State A that has provisionally paid benefits to a person of 1000 EUR. Later it becomes clear that Member State B is competent. This means that the institution of Member State A has a claim of 1000 EUR for unduly paid benefits. This institution has to request the institution of Member State B to deduct this amount from ongoing payments the latter institution owes to the person concerned. But what happens if the institution of Member State B can, under the legislation it applies, only deduct 10 EUR, by virtue of Art. 73(1) IR (see below)? Could in such cases Member State A follow immediately the way of recovery within the meaning of Art. 75-85 IR without being forced to follow firstly the offsetting procedure? The wording of Art. 71 IR ("wherever possible") seems to suggest that this would be possible, given the imbalance between on the one hand the extent of the administrative complications caused by the launch of the offsetting procedure and on the other hand the minor result this procedure would bring. But also the distinction between offsetting and recovery is not sharp enough. 4 Within offsetting a distinction must be made between the normal offsetting of unduly received benefits in accordance with Art. 72 IR and the offsetting of provisionally paid benefits or contributions in accordance with Art. 73 IR, which has to be applied by priority as a special rule. As to recovery, a distinction must be made between different steps of recovery: collection of missing data (requests for information in accordance with Art. 76 IR), the notification of instruments or decisions (Art. 77 IR) and the real recovery (Art. 78-85 IR).

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2. Offsetting a) International or cross-border national offsetting

For various aspects of offsetting it is important to make the following distinction. Some rules laid down in the IR require that offsetting (in a comparable national situation) is foreseen by national legislation. In that case the national rules on offsetting are extended by the IR to cross-border situations. According to other rules the offsetting has to be implemented even when national legislation does not foresee offsetting in a comparable national situation. In the latter case a real international rule on offsetting has been created. Since two Member States are always involved, a mixture of both approaches is possible. It is possible, for instance, to require that the national legislation of both the Member State that has unduly paid provisional benefits and of the Member State that has retrospectively become competent, foresees offsetting in a comparable national situation (double cross-border national offsetting). A double international offsetting is also possible namely if the rule in question stipulates that offsetting has to be implemented even when national legislation in neither of the two Member States foresees offsetting in a comparable national situation. Finally, both principles can be mixed, in so far as the State that has finally been identified as being competent can effectuate an offsetting only if its national law foresees offsetting in a comparable national situation (cross-border national offsetting). The State that has unduly paid provisional benefits can, however, make a request for offsetting, even when its national legislation does not foresee offsetting in a comparable national situation (international offsetting). For cross-border national offsetting it is not required that the national rules on offsetting explicitly take into consideration cross-border situations. If these rules foresee offsetting for national situations, they are also applicable to comparable cross-border situations thanks to the ‘assimilation of facts’ provision laid down in Art. 5. In this respect the rules on offsetting differ from the rules to prevent overlapping in the pension field, which explicitly require that the national rules do take into account benefits acquired in another State (Art. 53(3)(a)). 6 In this context it is important to keep in mind that in several cases national law does not have any rules on offsetting at all. Let us take the example of a Member State that has a uniform system of family benefits covering all residents. In such a Member State it is simply not possible that another national system becomes competent. Therefore, this Member State does not have national legislation on offsetting. Obviously the rules requiring a double national offsetting are the most difficult ones. Such rules can only be applied if there is a farreaching convergence of the national rules of the Member States concerned. If the national legislation of only one of the two Member States concerned foresees an offsetting, the cross-border offsetting cannot be implemented. 5

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b) Costs related to offsetting

Art. 74 stipulates that no costs are payable where the debt is recovered via the 7 offsetting procedure. It means that the administrative assistance for such offsetting is free-of-charge. This rule is actually superfluous, given the general principle laid down in Art. 76(2). c) Offsetting of provisionally paid benefits

The rules laid down in Art. 73 IR are new in comparison with the old regulations. They are based on Art. 6 IR that provides general rules on the provisional granting of benefits and on the provisional application of legislation and thus also on the provisional payment of contributions. Art. 73(1) IR deals with the procedure to get back provisionally paid benefits in cash. Firstly any institution that was provisionally competent and therefore had provisionally paid benefits (Art. 6(1) IR) or in cases of clear competence but uncertainty about the question of which institution had to grant benefits in cash, any institution that has provisionally paid benefits in cash (Art. 6(2) IR), has to draw up a statement of the amount provisionally paid and send it to the institution identified as being competent. This must happen at the latest three months after the applicable legislation has been finally determined or the institution responsible for paying the benefits has been identified. The institution that has been finally identified as being competent must deduct the amount due from the arrears of the corresponding benefits it owes to the person concerned and must transfer the amount deducted to the institution that had provisionally paid the cash benefits. If the amount of the provisionally paid benefits exceeds the amount of arrears, or if arrears do not exists at all, the institution identified as being competent must deduct this amount from ongoing payments and transfer the amount deducted to the institution which had provisionally paid the benefits. The offsetting with the arrears (Art. 73(1) second sentence, IR) is independent of the question whether or not the legislation of one of the Member States involved foresees offsetting in a comparable national situation (double international offsetting). However, the offsetting with ongoing payments (Art. 73(1) third sentence IR) is only possible "subject to the conditions and limits" of the legislation of the Member State where the institution which has been identified as being competent is established (cross-border national offsetting). The question as to whether the legislation of the Member State having provisionally paid the benefits foresees offsetting or not, is irrelevant (international offsetting). This offsetting only applies to cases covered by Art. 6 IR. Cases of provisional benefits provided for in other provisions, such as provisional pensions in accordance with Art. 50 IR, are not covered by Art. 73 IR. Cases covered by Art. 50 IR differ from those referred to by Art. 6 IR. In fact, Article 50 IR deals with cases where a person is indeed eligible for a pension, but where the amount of that pension has only provisionally been calculated. Such situations will never

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have as a result that the institution having provisionally paid the benefit has, at the end of the day, lost its entire competence, as is foreseen by Art. 6 IR. Where family benefits have been paid by the institution of a Member State not competent by priority, this institution may claim reimbursement of the excess from the institution with primary responsibility via the offsetting procedure of Art. 73 IR (where there is a difference of views between institutions, by virtue of the reference to Art. 6 IR in Art. 60(4) IR, and in all other cases by virtue of Art. 60(5) IR which refers directly to Art. 73 IR). The special rules on advance payments in cases of occupational diseases laid down in Article 37 IR are based on the same philosophy as Art. 6 IR. Therefore, Art. 37(2) explicitly declares the offsetting procedure laid down in Art. 73 IR applicable to these cases. 12 The implications of Art. 73(1) IR could be illustrated with the following example. A person normally pursues an activity as an employed person in Member State A (where the employer is established) and in Member State B (where he resides). In accordance with Art. 13 the Member State of residence is competent, because the person pursues a substantial part of his activities there. However, the two Member States involved have differing views about which Member State is the competent one. In accordance with the special rule on the determination of the applicable legislation (Art. 16(4) IR), Art. 6 IR has to be applied. By virtue of Art. 6(1)(b) IR the Member State of residence, Member State B, is in this case the Member State which is provisionally competent. It is this Member State that can provisionally collect contributions and that has to grant provisional benefits. If during this period the person falls ill, the institution which is provisionally competent grants a sickness benefit in accordance with its legislation. Let us assume that the amount equals to 1000 EUR per month. Two months later, the two Member States agree that no substantial part of the activities is pursued by the person in Member State B, which means that Member State A is retroactively competent. The amount of sickness benefit granted in accordance with the legislation of Member State A equals 800 EUR per month. The institution of Member State B informs the competent institution of Member State A that it had unduly paid sickness benefits to an amount of 2000 EUR. The competent institution will firstly apply Art. 73(1) second sentence IR and transfer an amount of 1600 EUR (two months of arrears) to the institution of Member State B. For the missing 400 EUR Art. 73(1) third sentence IR has to be applied (offsetting with ongoing payments). This offsetting, however, is subject to the condition that the legislation of Member State A foresees that from ongoing payments of sickness benefits deductions can be made to make up for undue payments of sickness benefits made by another institution of Member State A (!). As said above under point 2.a), not many Member States have national legislation foreseeing such offsetting. The competence for granting sickness benefits may change only in Member States having various systems for sickness insurance. Let us assume that Member State A does have national legislation allowing such offsetting and that maximum 25% can be deducted from the ongoing benefit. This would mean

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that Member State A can deduct monthly 200 EUR from the ongoing sickness benefit. However, if the sickness stops one month later, only 200 EUR has been transferred to the institution of Member State B. There is no longer any possibility of getting back the missing 200 EUR via the procedure of Art. 73 IR. Only the recovery procedure of Art. 75-85 IR may come into consideration. d) Offsetting of provisionally paid contributions

Art. 73(2) IR deals with the second aspect that automatically occurs in cases 13 of provisional competences in accordance with Article 6 IR. When another Member State is finally identified as being competent, the legal situation concerning contributions has to be dealt with. It is important to keep in mind that this provision only applies if it concerns a difference of views between institutions of two Member States that has to be settled in accordance with Art. 6 IR. In other cases where an institution has erroneously (not having been the com- 14 petent Member State) applied its legislation, Art. 73(2) IR does not apply. Such a situation could easily occur in cases where a person pursues activities in two or more Member States without respecting the duty to inform the institution referred to in Art. 16(1) IR. In such cases it might happen that a person who works for two employers, one in Member State A and one in Member State B, pays contributions to the institution of Member State A related to his work in that Member State, and contributions to the institution of Member State B in respect of his work pursued there. If it is discovered 20 or 30 years later (e.g. during the process of determining pension rights) that, in contradiction with the principles of Reg. No. 883/2004, the legislation of two Member States have been applied, this situation can only be settled while taking into account the rules of limitation foreseen by national legislation. If the national legislation of the Member States concerned foresees a period of limitation of three years for the recovery of unduly paid contributions, the legal situation concerning contributions can only be settled for the last three years. The previous 17 years of double insurance remain unchanged. But even for the three years for which a settlement is possible, the amount of contributions received during these years by the non-competent Member State cannot be refunded to the competent Member State via the procedure of Art. 73(2) IR, because it is not a case covered by Art. 6 IR. Only the recovery according to Art. 75-85 IR is possible in such cases. If however, from the start there has been a difference of views between the institutions of the two Member States involved about which Member State was competent, a full refund of the unduly received contributions by the non-competent Member State to the competent Member State via the procedure of Art. 73(2) IR is possible, while the national provisions on limitation do not then apply. The procedure for the refund of provisionally paid contributions in accor- 15 dance with Art. 73(2) IR is the following. By virtue of Art. 6(4) IR the institution which has finally been identified as being competent is deemed retroactively to have been so as from the date on which the person concerned became provisionRob Cornelissen

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ally subject to the legislation of the other Member State. Therefore, the settlement of the legal situation concerning contributions also has retroactive effect. This settlement is guided by the principle that offsetting between the institutions of the two Member States concerned has priority. Art. 73(2) IR stipulates that the institution which has provisionally received contributions must consult the competent institution of the Member State which is identified as being competent in order to ascertain what sums are due to it. The institution of the Member State which is identified as being competent must, within three months after the applicable legislation having been determined, make a request for the transfer of the provisionally received contributions. The transferred contributions will then be retroactively deemed as having been paid to the institution being identified as competent. If the amount of the provisionally paid contributions exceeds the amount the person owes to the institution identified as being competent, the institution which provisionally received contributions shall reimburse the amount in excess to the person concerned (this can be the insured person or the employer who had paid his part of the contributions). 16 At first sight these rules seem logical and simple. There are, however, still a number of open questions which should have been dealt with by the legislature in a more explicit way. The intention of the legislature was to exclude the application of possible national provisions on limitation as to the payment or reimbursement of contributions, but this is not explicitly reflected in the wording of Art. 73(2) IR. In this context it is important to underline that Art. 73(2) IR does not require that offsetting provisions are foreseen by the legislation of any of the two Member States concerned (it is, in other words, an international offsetting). It has to be assumed that even when according to the legislation of the provisionally competent Member State only contributions paid during the last three years can be reimbursed, or when in the Member State identified as being competent only contributions due over the last three years can be claimed, the offsetting within the meaning of Art. 73(2) IR can be done over the full period (e.g. five years) of provisional competence. By the rule that the contributions transferred are to be retroactively deemed as having been paid to the institution identified as being competent, the possibility is excluded that this institution imposes supplements or other penalties for late payments. 17 Another open question is how to proceed when various institutions are involved. Let us assume that in the provisionally competent Member State A the institution which is competent for all branches of social security has collected, during the period of provisional competence, social security contributions of 1500 EUR. In Member State B which is identified as being competent, two institutions are involved, one for sickness insurance to which contributions worth 700 EUR are owed retroactively, and one for all other branches of social security to which an amount of 1300 EUR are owed over the period concerned. When the institution in Member State B competent for sickness insurance approaches the institution of Member State A, this institution can transfer only an amount of

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700 EUR. If the other institution of Member State B does not take any initiative at all, the institution of Member State A has to reimburse the remaining amount of 800 EUR to the insured person. Therefore, if in a Member State several institutions are involved in contribution claims, a close cooperation is required in order to avoid that, due to lack of sufficient requests for transfers within the meaning of Art. 73(2) IR, the institution(s) of the provisionally competent Member State reimburse(s) a part of the received contributions to the insured person. Problems can also occur when national provisions diverge as to the repartition 18 of the contribution burden between employer and employee. Let us assume that in the provisionally competent Member State A contributions of a total amount of 1500 EUR have been collected, of which 750 EUR were paid by the worker and 750 EUR by the employer. In Member State B, identified as being competent, a total amount of 1000 EUR is retroactively owed over this period, of which 600 EUR are to be borne by the employer and 400 EUR by the worker. To whom must the remaining 500 EUR be reimbursed? Which legislation must logically be followed; that of Member State A, leading to a reimbursement of 250 EUR to both employer and worker, or that of Member State B resulting in a reimbursement of 300 EUR to the employer and 200 EUR to the worker? One could argue that a repartition of the remaining amount in accordance with the legislation of the provisionally competent Member State (in this case 250 EUR to both employer and worker) would lead to the fairest result. This problematic becomes even worse when it is combined with the problem of various institutions being involved as referred to above. A very close cooperation between all institutions and persons concerned is necessary in order to achieve the objective of the rules in question, namely to avoid disadvantages for the persons concerned as a result of change in competence. e) General rules on offsetting in cases of unduly received benefits

For cases other than provisionally paid benefits covered by Art. 73 IR, the 19 general rules of Art. 72 IR are to be applied. In a general way these rules correspond to those previously laid down in Art. 111 of the old Reg. No. 574/72. Art. 72 IR is an example of a double cross-border national offsetting. This means that the national legislation of both Member States concerned must allow offsetting in a comparable national situation. First condition for applying Art. 72 IR is that an institution of a Member State has paid undue benefits. If the legislation of this Member State allows deduction of unduly paid amounts from arrears or ongoing payments (regardless of the social security branch under which the benefit is paid), it can make a request to the institution of the other Member State to deduct the undue amount from arrears or ongoing payments owed to the person concerned. The requested institution has to check whether its legislation allows such an offsetting in a comparable national situation. If this condition is fulfilled, then the requested institution applies the offsetting procedure in accordance with its legislation and transfers the deducted amount to the requesting inRob Cornelissen

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stitution. The application of Art. 72 IR does not happen automatically. The Court ruled that Art. 111 of the old Reg. No. 574/72 (corresponding to Art. 72 IR) offered merely an option for the institution having made overpayments, which it may choose not to follow (judgment in Case C-199/98, Cabras, EU:C: 1990:127). However, the difference with the provisions of the old Reg. No. 574/72 is that Art. 71 IR lays down a clear priority rule, according to which claims to recover overpayments must be effected, "wherever possible", via the offsetting procedure in accordance with Art. 72 or 73 IR. Therefore, the ‘option’ to use the path of Art. 72 IR is restricted by the term "wherever possible" referred to in Art. 71 IR. 20 The functioning of Art. 72 IR could be illustrated by the following example. The competent institution of Member State A has paid during six month sickness benefits of 1000 EUR per month (total amount: 6000 EUR). According to the legislation of this Member State, entitlement to sickness benefit is entirely suspended if during the same period of time the person is entitled to an invalidity pension, regardless its amount. After a while it appears that the person is in Member State B retroactively entitled to an invalidity pension over these six months of 500 EUR per month. In line with Art. 5, the entitlement to an invalidity pension in Member State B will lead to a retroactive suspension of the sickness benefit in Member State A. This means that the institution in Member State A has made an overpayment of benefits of 6000 EUR. In the first place Art. 72 IR requires this institution to check whether its legislation foresees an offsetting in a comparable national situation. Let us assume that this legislation allows the deduction of overpayments from arrears, and from ongoing payments to a maximum of 20% of the ongoing pension. In this case, the institution in Member State A, having paid sickness benefits for six months, can request the institution in Member State B competent for granting invalidity pensions, to launch the offsetting procedure. The institution of Member State B now has to check whether its legislation allows an offsetting in a comparable national situation. If the legislation of Member State B also allows that an overpayment of sickness benefits can be deducted from arrears of invalidity pensions, it can transfer the amount of 3000 EUR to the institution of Member State A. Let us assume that the legislation of Member State B also allows deduction of overpayments of sickness benefits from ongoing payments of invalidity pensions, but only to a maximum of 10% of the ongoing pension, the remaining 3000 EUR could be deducted from the ongoing pension, however not to a maximum of 100 EUR per month, as foreseen by the legislation of the requesting Member State (20%), but only to an amount of 50 EUR per month (10%) as stipulated in the legislation of the requested Member State. 21 However, if the national rules of the Member States concerned are based on divergent philosophies, Art. 72(1) IR will not lead to a satisfactory offsetting. This would be the case, for instance, if the legislation of Member State B provides that, in cases of overlapping of entitlement to sickness benefits and inva-

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lidity pension, entitlement to invalidity pension is suspended. Obviously, the legislation of Member State B would then foresee the possibility of deducting overpayments of invalidity pensions from arrears and ongoing payments of sickness benefits, but not deducting overpayments of sickness payments from arrears or ongoing payments of invalidity pensions. In such cases of divergent legal situations Art. 72 IR does not work. Since it is rare that the legal situations in two Member States are identical, 22 Art. 72 IR has actually little importance in practice. The only ways left to the Member States concerned are either the recovery within the meaning of Art. 75-85 IR or an offsetting after having obtained the agreement of the person concerned f) Offsetting in the field of pensions with arrears (outstanding amounts)

Art. 72(2) IR contains special rules to Art. 72(1) IR for offsetting in the field 23 of pensions within the meaning of Title III, chapters 4 and 5. In a general way it corresponds to Art. 111(1) of the old Reg. No. 574/72. This provision presupposes that a Member State when awarding or reviewing (e.g. by virtue of Art. 50(4)) a pension, it has granted an amount which later appeared to be too high. This amount has then retroactively to be reduced to the amount which is effectively due. Another condition for applying this provision is that another Member State owes the person arrears of a corresponding pension for a period in the past. It is not required that the national rules concerned provide for such offsetting with arrears in a purely national situation (international offsetting). This constitutes a substantial relief in comparison with Art. 72(1) IR. This relief makes sense, since no national legislation takes into account the possibility that a person has received an overpayment of pensions, and that this person is at the same time entitled to another corresponding pension from the same Member State. Art. 72(2) IR requires that the pensions in the two Member States are "corresponding". For the question of what is to be understood by "corresponding" benefits, the case law of the Court concerning the interpretation of the notion "benefits of the same kind" within the meaning of the old Reg. No. 1408/71 (judgment in Case C-366/96, Cordelle, EU:C:1998:57) could be a helpful guidance. It follows from this case law that pensions calculated or provided on the basis of periods of insurance completed by the same person are to be considered as benefits of the same kind. If they are calculated or provided on the basis of periods of insurance completed by different persons the benefits cannot be treated as benefits of the same kind. (For pensions, this case law is reflected in the wording of Art. 53(1)). Also the question whether the benefits have the same purpose is relevant, as well as the basis on which the benefits are calculated and the conditions for granting them (judgment in Case C-107/00, Insalaca, EU:C: 2002:147). In a general way, it can be deducted from this case law that old-age, invalidity and survivors pensions based on the insurance of the same person are

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to be considered as "corresponding" benefits within the meaning of Art. 72(2) IR. 24 According to the wording of Art. 72(2) IR neither the time frame to which the overpayments are related nor the reason for the overpayment is of any relevance. Does this mean that any overpayment by a Member State could be deducted from arrears of another Member State? Let us take as an example an invalidity pension granted in Member State A in 2012. In Member State B, in which the person has also completed periods of insurance, the person does not yet fulfill the conditions concerning the required degree of invalidity. This means that he is not yet entitled to a pension from this Member State. Only in 2015 will he fulfill the conditions for entitlement to an invalidity pension from Member State B, due to a deterioration of his state of health. The procedure to determine his pension rights in Member State B, finally resulting in a monthly amount of 1000 EUR, takes six months so that the institution of Member State B owes the person arrears of in total 6000 EUR. At the occasion of a control procedure the institution of Member State A discovers that it had made a mistake in 2012 in calculating the amount of the pension and that the monthly amount granted was in fact 10 EUR higher than the amount effectively due. This equals an overpayment of 360 EUR over the period 2012-2015. Could this overpayment be offset with the arrears due by Member State B? It is not excluded by the wording of Art. 72(2)) IR, even if the legislature did not have such cases in mind. Such a wide interpretation would, however, certainly be to the disadvantage of the insured persons. Offsetting in cases like this would certainly not be possible where the legislation of Member State A forbids a retroactive correction of errors made by an institution to the detriment of the insured person. 25 Art. 72(2) IR certainly covers cases where Member State A increases its pension to a minimum benefit within the meaning of Art. 58, because the person concerned does not yet receive any pension from Member State B whereas it appears later that the person is retroactively entitled to a pension from Member State B. This would then lead to a reduction of the minimum benefit granted by Member State A equal to the amount of the pension awarded by Member State B. In such cases the period to which the overpayments by Member State A are related and the period covered by the arrears due by Member State B coincide. In this context it is important to underline that the minimum benefit in question must be a benefit covered by Title III chapters 4 or 5. The so-called special noncontributory benefits listed in Annex XI are not covered by Art. 72(2) IR, since they are not benefits falling under chapters 4 or 5, but under chapter 9 of Title III. Another case covered by Art. 72(2) IR is when it appears that at the end of the day the person concerned has completed more periods of insurance in Member State A than initially thought, leading to a recalculation (decrease of the prorata) of the pension due by Member State B. The institution of Member State B can then request the institution of Member State A to deduct the amount overpaid by Member State B from the arrears due by Member State A. If, however,

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the amount of the overpayments made by Member State B exceeds the amount of the arrears due by Member State A, the institution could try to recover the remaining amount either via an offsetting with ongoing payments by Member State A in accordance with Art. 72(1) IR, a recovery within the meaning of Art. 75-85 IR or, of course, an offsetting in accordance with national law (e.g. with ongoing payments of the same Member State). Here too, the application of Art. 72(2) IR is not compulsory. It is an option for 26 the institution concerned to make a request for the offsetting procedure. The institution having made the overpayments must, within a period of two months after having received information from the institution of the other Member State about the amount of the arrears, communicate to the latter institution the amount of the overpayments. If this deadline is not respected the institution of the other Member State must pay without delay the arrears to the person concerned. For the institution having made the overpayments, a recovery within the meaning of Art. 75-85 IR remains then the only path to try to recover the undue sum. In fact, the wording of Art. 71 IR does not seem to exclude the possibility to invoke the recovery procedure in accordance with Art. 75-85 IR if the institution has been silent for the two months referred to in Art. 72(2) IR. g) Offsetting with social welfare assistance

Art. 72(3) IR deals with a special case of overlapping of benefits, namely the 27 award of social welfare assistance by a Member State during a period for which another Member State later grants social security benefits. This provision corresponds largely to Art. 111(3) of the old Reg. No. 574/72. Even when Reg. No. 883/2004 does not apply to social welfare assistance (it can be assumed that the notions "social welfare assistance" and "social and medical assistance" within the meaning of Art. 3(5) are more or less identical), the material scope of the regulation is on this specific point for the purpose of offsetting extended to social assistance. The first condition for an offsetting in accordance with this provision is that 28 the welfare agency of a Member State has awarded social welfare assistance for a period during which the person is also entitled to social security benefits in another Member State. In other words, the two periods must coincide. The second condition is that, in accordance with the legislation of the first Member State, the welfare agency is, in a comparable national situation, entitled to reclaim the assistance paid from a social security institution of that Member State, had it paid a corresponding social security benefit. If these conditions are fulfilled, the welfare agency may (it is, once again, not obliged to do so) request the social security institution of the other Member State to deduct the amount of assistance paid from the amounts which that institution pays to the person concerned. This social security institution carries out the offsetting in the same way as if it would have done on the basis of a request coming from a welfare agency of its own State. Art. 73(3) IR is another example of a double cross-border national offsetRob Cornelissen

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ting which does not work if the national legislation of one of the Member State concerned does not foresee the possibility to reclaim benefits between welfare agencies and social security institutions. Depending on the national legislation of the Member State where the social security institution is established, the offsetting may be done with either the arrears which are due by this institution for periods during which social assistance was paid, or with ongoing future payments. 29 If it is not possible to invoke Art. 72(3) IR in order to recover the unduly paid social assistance in another Member State, Reg. No. 883/2004 does not offer the welfare agency an alternative way to recover the undue sum. Neither an offsetting in accordance with Art. 72(1)or(2) IR nor a recovery within the meaning of Art. 75-85 IR is possible, since these provisions only apply to social security benefits covered by Reg. No. 883/2004. 30 The functioning of Art. 73(3) IR could be illustrated by the following example. A resident of Member State A has always worked as a frontier worker in Member State B. When he approaches his pensionable age, he applies for a pension in Member State B. Due to complications of the application, this Member State cannot make advance payments. The process of determining his pension rights takes 10 months. During this period Member State A pays him social assistance equal to 500 EUR per month. The pension granted by Member State B retroactively amounts to 1000 EUR per month. If in accordance with the legislation of Member State A the welfare agency is entitled to reclaim the assistance paid from a social security institution of that Member State on arrears of pensions over the period for which assistance had been paid, it may request the institution of Member State B to deduct an amount of 5000 EUR from the arrears of pensions due by that institution. This institution has to deal with this request as if it came from a welfare agency of Member State B. If the legislation of Member State B stipulates that in a comparable national situation the welfare agency would be entitled to a claim on arrears of pensions, it has to transfer 5000 EUR of the arrears of pensions to the welfare agency of Member State A. However, if the legislation of Member State B stipulates that only 25% of the arrears can be transferred to the welfare agency and that the remaining amount may be deducted from ongoing payments of pensions, but only to a maximum rate of 25%, then only 2500 EUR could be deducted from the arrears and be transferred to the welfare agency of Member State A. The remaining claim of 2500 EUR will be gradually deducted from the ongoing pension payments and be transferred to the welfare agency in 10 installments of 250 EUR. 3. Recovery a) Principles 31

For the first time the IR contains binding rules for all Member States concerning the recovery of claims. By virtue of Art. 75(1) IR these claims can relate to

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contributions or to benefits paid or provided unduly. These claims include all related costs, such as interest, fines, administrative penalties and all other charges connected to the claim. In its 329th meeting the Administrative Commission clarified that Art. 75-85 IR only refer to benefits falling within the material scope of Reg. No. 883/2004, including special non-contributory cash benefits, but that they do not refer to social assistance (which is, by way of exception, explicitly covered by Art. 72(3) IR). By virtue of Art. 75(1) second and third indent IR, Member States have to designate special institutions, namely institutions which can make a corresponding request ("applicant party") and institutions to which a request can be made ("requested party"). These institutions have to be listed separately in the electronic directory according to their function (as "applicant party" or as "requested party"). Member States also have to decide whether this function is assigned only to a selected central office or whether all institutions could be taken into account. They have to decide, for instance, whether to designate only one point for the recovery of claims relating to contributions or whether this function is split up over the various branches (e.g. one point for claims relating to contributions in the field of sickness, maternity and equivalent paternity, one in the field of accidents at work and occupational diseases, etc.). These designations will be decisive for the question whether the recovery works in practice or not. In accordance with Art. 75(3) IR practical implementation measures must be taken by the Administrative Commission. Such measures include the setting of a minimum threshold for the amounts for which a request for recovery can be made. At its 318th meeting the Administrative Commission decided to fix that threshold at 350 EUR. However, national thresholds going beyond this amount or derogating amounts contained in bilateral agreements are not affected by this decision. The recovery takes place in three different steps. First of all the IR provides rules according to which a Member State can request information about a person staying in another Member State (Art. 76 IR). Then the IR determines how to notify a person in another Member State of instruments and decisions relating to a claim and its recovery (Art. 77 IR). Finally the cross-border recovery procedure is dealt with in detail (Articles 78-85 IR). All these rules have not been designed afresh for the field of social security. In fact, the legislature was able to build on an already existing and well- functioning system for the recovery of claims in the field of taxation (Directive 76/308 of 15 March 1976, O.J. L 73 of 19 March 1976, modified by Directive 2001/44, O.J. L 175 of 28 June 2001 and codified by Directive 2008/55 of 26 May 2008, O.J. L 150 of 10 June 2008). The provisions laid down in the IR derogate only marginally from the provisions contained in the above mentioned Directives. Therefore, the case law of the Court as well as the literature concerning the interpretation of the provisions on recovery in the taxation field are also of importance for the interpretation of Art. 75-85 IR. Rob Cornelissen

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However, it is worthwhile mentioning, that since the adoption of the IR, Directive 2008/55 has been repealed and replaced by Directive 2010/24 of 16 March 2010 (O.J. L 84 of 31 March 2010). According to recital 3 of this Directive, the previous arrangements "have proved insufficient to meet the requirements of the internal market as it has evolved over the last 30 years." One of the main objectives of Directive 2010/24 is to make mutual assistance for the recovery of taxation claims "more efficient and effective" and to facilitate it in practice. The Administrative Commission and the European Commission will certainly take these new provisions into account in the framework of the implementation of the review clause laid down in Art. 86(3) IR. 37 One of the principles of all these provisions on recovery is that the requested institution takes virtually all measures in accordance with its own legislation. It is, in this special aspect of mutual assistance, not obliged to take into consideration the law of another State, which is the only way to make these rules workable in practice. This special aspect of mutual assistance requires a very close cooperation between the requesting and requested institutions. 36

b) Requests for information 38

Art. 76 IR enables as a first step the involvement of the requested institution, so that the requesting institution can receive information which it cannot get through the means at its disposal in its own territory (e.g. complete and correct address of the debtor of contributions in the Member State of the requested institution). This information is provided by the requested institution in accordance with its own legislation, as if it were a request for information in relation to the recovery of "similar claims" arising in its own Member State. At its 329th meeting the Administrative Commission decided that the term "similar claims" should be interpreted widely. It covers in any case claims belonging to the same branch of social security (e.g. sickness cash benefits, or cash benefits in respect of accidents at work or occupational diseases). It is not necessary to examine whether or not the benefits in question are calculated in a similar way in both States. By virtue of Art. 76(3)(a) IR no information can be provided by the requested institution which it would not have been able to obtain (on legal or practical grounds) for the purposes of recovering similar claims arising in its own Member State. The same ban applies for information which would disclose any commercial, industrial or professional secrets (Art. 76(3)(b) IR) or information the disclosure of which would be liable to prejudice the security of, or be contrary to, the public policy of the Member State in question (Art. 76(3)(c) IR). It is difficult to imagine that claims in the field of social security could fall under the last category. Concerning the last two exclusion grounds (Art. 76(3)(b)and(c) IR), the Administrative Commission has clarified at its 329th meeting that these grounds can only be invoked if they also led to a refusal of disclosure of information in a comparable national situation. In other words, on this point claims coming from another Member State should be treated in the same way as do498

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mestic claims- neither better nor worse. Each refusal based on Art. 76(3)(b)or(c) IR to provide information by the requested institution requires specific explanation of the reasons for such a decision to the requesting institution and should be made only in exceptional cases. In addition, the Administrative Commission decided that as a rule the requesting institution, before making a request for recovery within the meaning of Art. 78 IR should send a request for information under Art. 76 IR. On the basis of sincere cooperation between the institutions the requested institution should take all necessary steps to obtain the same information as it would at national level for its own claims, although without excessive costs or disproportionate efforts (329th meeting of the Administrative Commission). c) Notification

Art. 77 IR deals with the next step of the cross-border recovery procedure, 39 namely the notification of instruments and decisions (e.g. payment requests, since also documents related to the claim itself are covered; other examples are recovery decisions of the institution or of a tribunal of the requesting State). The notification takes place in accordance with the legislation of the requested State. Art. 77 IR only concerns the notification of claims or recovery documents. Other documents, such as a decision to grant or withdraw a benefit, a decision about compulsory insurance or a request to transmit additional evidence, cannot be notified according to the procedure foreseen by Art. 77 IR. d) Recovery

By virtue of Art. 78 IR an institution in another Member State can be request- 40 ed to recover a claim. The first condition is that there should be in the requesting Member State an instrument permitting the enforcement of the claim. The claim should not have been contested. It simply depends on the question whether or not an appeal or a legal remedy has been lodged against the claim or the instrument permitting its enforcement. It is not a prerequisite that the deadlines for lodging an appeal have expired and that the claim or instrument can no longer theoretically be contested. But even in case of an appeal pending in the requesting State, a request for enforcement can be made, if such recovery, notwithstanding an appeal, is possible according to the legislation of both the requesting and the requested States (Art. 81(2)second par IR). Another condition stipulated by Art. 78 IR is that the requesting institution has applied all available recovery procedures in its own State. Finally, the period of limitation for both the claim and the recovery according to the legislation of the requesting State should not have expired. In other words, a recovery should in a comparable national situation still be possible in the requesting Member State. The instrument permitting enforcement of the recovery must be directly rec- 41 ognized by the requested institution and automatically be treated as an instrument permitting the enforcement of a claim of the Member State in which the requested institution is situated (Art. 79(1) IR. A decision of a tribunal confirming Rob Cornelissen

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the initial decision of the requesting institution has to be considered as an instrument permitting the enforcement (Art. 81(4) IR). Some Member States, however, had problems with such an unconditional automatism. Therefore, it is stipulated that, where appropriate, in accordance with the legislation of the requested State an additional acceptance, recognition or supplementing of the instrument of the other Member State (or even a replacement by a new instrument of the requested State) is possible (Art. 84(2) and Art. 79(2) IR). In that case the additional measures should be taken as soon as possible. This additional arrangement meets the concerns of those Member States whose legal tradition requires that a foreign instrument permitting the enforcement of a claim must always be confirmed by a decision of its own judiciary. 42 The whole recovery procedure takes place in accordance with the laws (not only legislation within the meaning of Art. 1(l), but also legislation on recovery of claims in fields other than social security), regulations and administrative procedures applicable to the requested institution, as if it concerned a similar claim of the aforementioned institution (Art. 84(1)). The "entire amount" of the claim that is recovered by the requested institution must be remitted to the requesting institution (Art. 80(1) IR). At its 329th meeting the Administrative Commission agreed that the word "entire" refers to the amount of the claim which the requested institution managed to recover, regardless of the fact whether it is the full amount of the claim the requesting institution had applied for, or only a part thereof. The Administrative Commission confirmed the possibility of partial transfers of the recovered claims in cases where the claim could only be recovered in parts. In this context it was emphasized that institutions had to act in a rational way, so that the transfer costs would not exceed the amount of the transferred claim. In case of doubts these issues should be agreed upon under bilateral arrangements between the requesting and requested institutions. For the question as to which amount is to be transmitted, also Art. 85(1) IR, according to which the requested institution shall recover from the debtor any costs linked to recovery which it incurs, should be taken into account. In so far as the use of conversion rates is required, point 6 of Decision H3 of the Administrative Commission of 15 October 2009 (O.J. C 106 of 24 April 2010) lays down in detail the specific day for conversions for the purposes of offsetting and recovery procedures (the day the first request was sent). At its 329th meeting the Administrative Commission agreed that this conversion rate should remain unchanged during the whole procedure of recovery. 43 If by virtue of the legislation applicable to the requested institution claims in the field of social security enjoy privileges (e.g. in bankruptcy or settlement proceedings) similar claims coming from another Member State enjoy the same privileges (Art. 84(3)). When, for example, a company in Member State A falls into bankruptcy and an institution from Member State B (where an employee of this company is insured) tries to recover (in accordance with Art. 78 IR), contribution claims which it has against this company, these claims are privileged

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above other claims, if by virtue of the legislation of Member State A contribution claims in the field of social security enjoy privileges. The legislation of the Member State in which the requested institution is situated is also decisive for any payment deadlines, installment payments and default interests (Art. 80(2) IR). Actions to contest a claim or an instrument permitting the enforcement (not 44 the concrete enforcement measure!) are to be brought in accordance with the legislation in force in the Member State in which the requesting institution is situated. In this case an exchange of information between both institutions is essential (Art. 81(1) IR). If the requested institution has already started taking enforcement measures, it must immediately suspend the procedure, unless a continuation of the recovery is permitted by the legislation of both the requesting and the requested State in spite of the contestation (Art. 81(2) second para. IR). In contrast, actions to contest concrete enforcement measures are to be brought according to the legislation in force in the Member State where the requested institution is situated (Art. 81(3) IR). When a person who is concerned by a pending recovery is of the opinion that the alleged overpayment of the benefit which is in the process of being recovered in the Member State where he resides according to Art. 75-85 IR, was wrongly calculated, it has to bring action in the requesting Member State. If, however, this person wants to contest that for this claim his property situated in the requested Member State will be auctioned, he has to bring action to contest this concrete enforcement measure in the requested Member State. The same principle also applies to the periods of limitation (Art. 83 IR): for the claim and the instrument permitting its enforcement the periods of limitation are determined by the legislation of the Member State where the requesting institution is situated. For the concrete enforcement measures the periods of limitation stipulated by the legislation of the requested Member State are decisive. In order to protect both the requested institution and the person concerned 45 from too far-going recovery requests, Art. 82 IR contains limitations. The request for recovery should not, because of the situation of the debtor, create "serious economic or social difficulties" in the Member State in which the requested institution is situated. At its 329th meeting the Administrative Commission clarified that also for the question whether or not there are "serious economic or social difficulties" the requested institution has to operate as if it concerned a purely domestic debtor. For this protective clause the legislation of the requested Member State is decisive. It is not really clear, however, what is to be understood by "serious economic or social difficulties". Apparently Art. 82 IR could be invoked in order to prevent a recovery in cases where an employer would fall into bankruptcy as a result of the recovery procedure for contributions due, if in such circumstances a recovery request may be refused under the legislation of the requested Member State. Art. 82(1)(b) IR provides for a European wide period of limitation of five years between the moment the instrument permitting the Rob Cornelissen

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recovery was established and the request for cross-border recovery. Therefore, this provision creates European procedural law. Until recently Member States were not sure when the five years referred to in Art. 82(1)(b) IR actually began, given the fact that Art. 75-85 IR (as completely new rules in the area of social security) only entered into force on 1 May 2010. At its 329th meeting the Administrative Commission decided that neither the date on which the claim emerged nor the date of the instrument permitting its recovery had to be after 1 May 2010 -date of entry into force of Reg. No. 987/2009. The only limitation for providing assistance in the recovery procedure is that the request must be sent within five years after the instrument permitting the recovery has been established. In fact, according to settled case law of the Court (judgment in joined Cases C-212/80 to 217/80, Salumi, EU:C:1981:270), procedural rules are generally held to apply to all proceedings pending at the time when they enter into force, whereas substantive rules are usually interpreted as not applying to situations existing before their entry into force. In a taxation case the Court has ruled that provisions governing the recovery of claims must be considered as procedural rules (judgment in joined Cases C-361/02 and C-362/02, Tsapalos, EU: C: 2004:401). Therefore, the date of entry into force of Reg. No. 987/2009 is of no relevance in this context. The requested institution should provide assistance even if the claim was created, or the instrument permitting its recovery was established before 1 May 2010 or before the date of accession of the requesting Member State concerned to the EU, provided, of course, that the recovery request was submitted within five years after the instrument permitting the recovery was established. 46 The requesting institution can also make a reasoned request for precautionary measures. Before taking such measures the requested institution has to examine whether such a request is admissible according to its own legislation. 47 Art. 85(1) IR contains special rules on costs related to recovery. In fact, the requested institution must recover from the debtor any costs linked to recovery which it incurs, in accordance with its legislation, as if it acted in a purely national situation. The mutual assistance itself, however, is free of charge (Art. 85(2) IR reconfirming the general free-of-charge rule for mutual assistance laid down in Art. 76(2)). But this does not exclude any costs or losses incurred in the framework of the recovery (Art. 85(3) IR). If, for instance, the requested institution had, in the framework of the recovery, sold property of the debtor and later it appears that the instrument permitting the recovery was incorrect, the debtor will bring action for compensation against the requested institution, since it concerns a concrete enforcement measure. These costs have to be reimbursed by the requesting institution, since the requested institution did not have any influence on either the substance of the claim nor on the validity of the instrument. On 20 June 2013 the Administrative Commission adopted Decision R1 concerning the interpretation of Art. 85 IR (O.J. C 279 of 27 September 2013). The objective of this Decision is to align as much as possible the inter-

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pretation of the recovery provisions in the social security field with the rules and practices concerning recovery of claims in the tax field following the adoption of Directive 2010/24 (see above). The decision clarifies that the costs of recovery referred to in Art. 85(1) IR must be refunded by the debtor in addition to the amount of the claim, and that the costs of recovery have to be settled first. Only after these costs are settled, shall the claim of the requesting institution be satisfied (priority rule for costs). In cases where costs related to recovery cannot be recovered directly from the debtor (as a consequence of the national legislation of the requested institution or simply because the amount recovered from the debtor does not permit the satisfaction of the entire claim including costs related to recovery) such costs can be deducted from the recovered amount. Only the balance shall be remitted to the requesting institution. In cases where the recovery action does not result in the recovery of an amount which at least covers the costs related to recovery, or where recovery action was completely unsuccessful but costs related to recovery other than mutual assistance itself were incurred by the requested institution, the requesting institution has to reimburse these costs, unless the institutions concerned agree on a specific reimbursement arrangement or if a waiver of reimbursement is concluded between the two institutions. e) Review of the provisions concerning offsetting and recovery

Art. 86 IR concerning the review of various provisions of the IR should have 48 been part of Title V of the IR and not of its chapter III of Title IV. In fact, this provision concerns a variety of provisions such as Art. 67(2)(5)and(6) IR (deadlines for introduction and settlement of claims related to reimbursement of costs for benefits provided in the field of sickness, maternity and equivalent paternity, as well as accidents at work and occupational diseases), Art. 13 IR (rules for conversion of periods expressed in different units) and Title IV chapter I and chapter III IR (reimbursement of costs, and recovery and offsetting). As to the recovery procedures, Art. 86(3) IR reflects the intention of the legislature to first test out the functioning of the current arrangements and to examine whether these rules which had been developed in the field of taxation, are indeed transferable as such to the field of social security. To this end, the Administrative Commission has to present a report no later than 1 May 2015. This report could serve as a basis for a European Commission proposal to modify the current rules in order to make the procedures more efficient and balanced. In the framework of the implementation of this review clause the European Commission will certainly also take into account the developments in recovery of claims which have taken place in the tax field after the adoption of the IR (see above under 3.a).

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Article 85 Rights of institutions (1) If a person receives benefits under the legislation of one Member State in respect of an injury resulting from events occurring in another Member State, any rights of the institution responsible for providing benefits against a third party liable to provide compensation for the injury shall be governed by the following rules: (a) where the institution responsible for providing benefits is, under the legislation it applies, subrogated to the rights which the beneficiary has against the third party, such subrogation shall be recognised by each Member State; (b) where the institution responsible for providing benefits has a direct right against the third party, each Member State shall recognise such rights. (2) If a person receives benefits under the legislation of one Member State in respect of an injury resulting from events occurring in another Member State, the provisions of the said legislation which determine the cases in which the civil liability of employers or of their employees is to be excluded shall apply with regard to the said person or to the competent institution. Paragraph 1 shall also apply to any rights of the institution responsible for providing benefits against employers or their employees in cases where their liability is not excluded. (3) Where, in accordance with Article 35(3) and/or Article 41(2), two or more Member States or their competent authorities have concluded an agreement to waive reimbursement between institutions under their jurisdiction, or, where reimbursement does not depend on the amount of benefits actually provided, any rights arising against a liable third party shall be governed by the following rules: (a) where the institution of the Member State of residence or stay accords benefits to a person in respect of an injury sustained in its territory, that institution, in accordance with the provisions of the legislation it applies, shall exercise the right to subrogation or direct action against the third party liable to provide compensation for the injury; (b) for the application of (a): (i) the person receiving benefits shall be deemed to be insured with the institution of the place of residence or stay, and (ii) that institution shall be deemed to be the institution responsible for providing benefits; (c) paragraphs 1 and 2 shall remain applicable in respect of any benefits not covered by the waiver agreement or a reimbursement which does not depend on the amount of benefits actually provided. I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Cross-border subrogation – direct rights of the institutions . . . . . . . . . 2. Cross-border exclusion of civil liability of employer or colleague employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Subrogation in case of derogating reimbursement agreements. . . . . .

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I. Spirit and Purpose 1

Art. 85 contains a special aspect of the general assimilation of facts referred to in Art. 5. In view of the complex interplay between civil law on liability and

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social law it was decided not to abandon the special and detailed rules which were already laid down in Art. 93 of the old Reg. No. 1408/71 for these kinds of assimilation. These rules are aimed at helping those institutions which are responsible for providing benefits in respect of an injury resulting from an event for which a person is liable to provide compensation, so that these institutions enjoy in cross-border situations the same rights against that person as they would have had in a purely national situation. These rules are in particular important for benefits in case of sickness, accidents at work, occupational diseases, invalidity and death. These rules apply not only to accidents at work, but also to accidents or injuries not connected to the person's work (judgment in Case 31/64, Bertholet, EU:C:1965:18). The assimilation may also work to the benefit of the person having caused the injury. If the national legislation provides for an exclusion of liability (e.g. for an employer), then this exclusion is extended to a corresponding cross-border situation. Art. 85(1) requires the mutual recognition of a subrogation to the rights which 2 the beneficiary has, or of the direct right the institution responsible for providing benefits has against the person having caused the injury. Art. 85(2) determines which national legislation is decisive for examining whether or not provisions providing for an exclusion of liability are applicable. Finally, Art. 85(3) contains special rules for cases where benefits are not provided by the competent institution, but by the institution of the place of residence or stay, and where the reimbursement of costs falls under a waiver agreement or is determined on the basis of fixed amounts. Art. 85 does not create autonomous rights of recourse or autonomous subro- 3 gation rights. This continues to be a matter of national competence. Neither does Article 85 deal with the question in which State actions for compensation should be brought before court. This is exclusively determined by Reg. No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (O.J. L 12 of 16 January 2001) (judgment in Case C- 347/08,Voralberger Gebietskrankenkasse, EU:C:2009:561). II. Commentary 1. Cross-border subrogation – direct rights of the institutions

Art. 85 deals with situations in which entitlement in the field of social securi- 4 ty is determined by the legislation of one Member State, but entitlement to compensation by the legislation of another Member State. Let us take as an example a person who is insured in Member State A and who is during a stay in Member State B the victim of a car accident there, caused by a resident of Member State B. The institution of Member State A grants the person an invalidity benefit. In a general way, entitlement to compensation is determined in accordance with the legislation of the Member State where the injury occurred, in this case Member State B. If the legislation of Member State A foresees that, for a purely national Rob Cornelissen

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case (car accident in Member State A) the social security institution is subrogated to any entitlement to compensation the victim has against the liable person, or if that legislation provides the institution with any direct right against the liable person, such subrogation, or direct rights, also apply to the cross-border situation. This means that the institution of Member State A is subrogated to any entitlement to compensation the victim has, in accordance with the legislation of Member State B, against the liable person, or that the institution in Member State A has direct rights to compensation against the liable person. 5 Art. 85 does not give a clear answer to the question as to what happens in cases where the national rules in question diverge, e.g. where the legislation of Member State A foresees a subrogation, but where the legislation of Member State B explicitly excludes such subrogation for a purely national situation. According to German literature the subrogation is to be determined in accordance with the legislation of the Member State to which the institution belongs and should thus apply in such cases. This has been confirmed by the Court (judgment in Case C-428/92, DAK, EU:C:1994:222). In this judgment the Court clarified that the legislation of the Member State to which the institution belongs, determines not only the question whether or not there is any subrogation, but also the extent of the claims to which that institution is subrogated. However, the question which of the subrogated or direct rights can be enforced in the State where the injury occurred is exclusively governed by the legislation of the latter State and not by the legislation of the Member State to which the institution belongs. The exercise of the subrogated or direct rights of the institution provided by the legislation of the Member State to which the institution belongs, cannot exceed the rights that the victim has against the person who caused the injury (judgment in Case C-397/96, Kordel, EU:C:1999:432). The subrogation to any entitlement to compensation, or the exercise of direct rights foreseen by the legislation to which the institution belongs, is therefore bound by the limits for compensation determined by the legislation in whose territory the injury occurred. Questions concerning protection of the liable person are part of liability law and are therefore determined by the legislation of the Member State on whose territory the injury was sustained. 6 The subrogated or direct rights referred to in Art. 85 only concern social security institutions which apply legislation within the meaning of Art. 1(l) and not private insurance bodies or agencies which have paid benefits to an insured person on the basis of a private law contract (judgment in Case 313/82, Tiel Schadeverzekering, EU:C:1984:107). The subrogated or direct rights referred to in Art. 85 only relate to compensation for damage occurred by the institution, which means that they are limited to the benefits provided by the institution to the insured person. Claims the victim might have against the liable person which go beyond the benefits provided by the institution, such as compensation for immaterial damage or car damage are not covered by Art. 85 (judgment in Case 72/76, (Töpfer), EU:C:1977:27).

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2. Cross-border exclusion of civil liability of employer or colleague employee

Art. 85(2) deals with another aspect of interplay between social security law 7 and civil law on liability. If the legislation of the Member State to which the institution responsible for providing benefits belongs, foresees an exclusion of the civil liability of the employer or of colleagues of the person to which it provides benefits, this exclusion is extended to an injury occurred in another Member State. Let us take as an example a worker who pursues an activity as an employed person in a company in Member State A, but who is subject to the social security legislation of Member State B (e.g. by virtue of Art. 13(1)). He becomes injured as a consequence of an accident at work for which the employer is, according to the legislation of Member State A, liable. If in accordance with the legislation of Member State B the employer is, by paying contributions for the accidents at work insurance, excluded from any civil liability for accidents at work, this exclusion also applies for employers established in another Member State who employ workers who are socially insured in Member State B. This extension of the exclusion of civil liability also applies in cases where the employer and worker have, in accordance with Art. 21(2) IR, agreed that the worker pays the contributions. If however, the legislation of the Member State to which the institution responsible for providing benefits belongs, does not foresee any exclusion of the civil liability of the employer, an employer established in another Member State is also not excluded from civil liability, even if he would have been excluded from civil liability according to the legislation of the Member State where he is established and where the accident at work happened (Art. 85(2) second para.). 3. Subrogation in case of derogating reimbursement agreements

Art. 85(3) contains a special rule for cases where two Member States have, in 8 accordance with Art. 35(3) or Art. 41(2), concluded an agreement to waive reimbursement between institutions or where such reimbursement is based on fixed amounts rather than on the real amount of the benefit provided. Because of the reference to Art. 35(3) and 41(2), this rule only applies to subrogations concerning benefits in kind provided in case of sickness, accidents at work or occupational diseases. Let us take as an example a person who is insured in Member State A and who needs, as a result of a car accident which occurred in Member State B, health care which is medically necessary. This health care is, in accordance with Art. 19, provided by the institution of Member State B on behalf of the institution of Member State A. Member States A and B have concluded an agreement to waive reimbursements between institutions. Since the institution of Member State B cannot receive any reimbursement of costs from the competent institution of Member State A, it is the institution of Member State B that is subrogated to the claim for compensation which the car accident's victim has against the person liable to provide compensation for the injury. The question as

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to whether, and to which extent the latter institution is subrogated to any claim for compensation the person having received the benefit has against the liable person, does not depend on the legislation of the competent Member State (in our case Member State A), but is exclusively governed by the legislation of the Member State to which the institution of the place of stay belongs (in our example Member State B).

Article 86 Bilateral agreements As far as relations between, on the one hand, Luxembourg and, on the other hand, France, Germany and Belgium are concerned, the application and the duration of the period referred to in Article 65(7) shall be subject to the conclusion of bilateral agreements. 1

This rule was part of the compromise which was at the very last minute reached in Council on the chapter "unemployment benefits" of the regulation. Luxembourg, with its very high number of frontier workers residing in neighbouring Member States but working in Luxembourg, was very concerned about the financial burden it feared it had to carry as a result of new rules concerning unemployed frontier workers. In fact, contrary to the old Reg. No. 1408/71, rules have been inserted in Art. 65(6)and(7) providing for a system of reimbursement by the State of last employment to the State of residence, of the costs of unemployment benefits provided by the Member State of residence to wholly unemployed frontier workers. It would have been more appropriate to have these very detailed rules in the IR rather than in the basic regulation itself, since these rules do not concern the rights or obligations of persons covered by the regulation, but the sharing of the burden of the costs of benefits for such persons between Member States. The mere fact that these detailed reimbursement rules are part of Art. 65 itself underline once again the character of Art. 65 as a political compromise. Art. 65(6) provides for a reimbursement by the State of last employment during the first three months. In cases referred to in Art. 65(7) this period is extended to five months. Given the aforementioned special position of Luxembourg, Art. 86 stipulates that on the application and duration of the extended period referred to in Art. 65(7) bilateral agreements have to be concluded between Luxembourg and the neighbouring Member States. Art. 86 does not answer the question of what happens if such bilateral agreements are not concluded. It could be argued that under such conditions Art. 65(7) does not apply at all and thus exclusively the 'normal' period of reimbursement referred to in Art. 65(6) has to be applied. This is the essential difference with Art. 65(8) which contains a general possibility for derogating agreements between Member States on reimbursement, allowing also different durations of periods of reimbursement. However, if such agreements are not concluded, then the provisions

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laid down in Art. 65(6)and(7) are to be applied as they stand. Until now the Administrative Commission has not been informed of the existence of any agreements referred to in Art. 86.

Title VI Transitional and final provisions Overview Art. 87 as well as Art. 93 and 94 IR contain the usual transitional provisions 1 which stipulate how to deal with facts which have occurred before the date of application of the current regulations or facts which also relate to the past. Art. 87 a contains corresponding provisions with respect to the new rules brought by Reg. No. 465/2012 (O.J. L 149 of 8 June 2012). These provisions guarantee the advantages of the new regulations for the persons concerned even if they have already received, or could have received, benefits before the date of application of the new regulations. Art. 95 IR contains special transitional provisions for electronic data exchange (see commentary Art. 78). These provisions are necessary in order to solve questions inevitably arising as a result of differences in scope and substance between Reg. No. 1408/71 and 883/2004 in cases which are chronologically covered by both regulations. In addition, this Title also deals with some important arrangements for the ap- 2 plication of both regulations which do not fit into any other Title. Art. 88 and Art. 92 IR stipulate how to update the annexes of both regulations. Art. 89 is the basis for the IR (even when such basis is superfluous since the IR is, like Reg. No. 883/2004, based on Article 48 TFEU). Art. 90 and 96 IR stipulate, with some exceptions, the repeal of the old Reg. No. 1408/71 and 574/72. Finally Art. 91 and 97 IR contain the provisions which indicate the date of entry into force of the current regulations. The commentary on these provisions is based on the commentary of Bernhard Spiegel published in the original German version by NOMOS.

Article 87 Transitional provisions (1) No rights shall be acquired pursuant to this Regulation for the period before its date of application. (2) Any period of insurance and, where appropriate, any period of employment, self-employment or residence completed under the legislation of a Member State prior to the date of application of this Regulation in the Member State concerned shall be taken into consideration for the determination of rights acquired under this Regulation.

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Part 2: Regulation (EC) No 883/2004 (3) Subject to paragraph 1, a right shall be acquired under this Regulation even if it relates to a contingency arising before its date of application in the Member State concerned. (4) Any benefit which has not been awarded or which has been suspended by reason of the nationality or place of residence of the person concerned shall, at the request of that person, be provided or resumed with effect from the date of application of this Regulation in the Member State concerned, provided that the rights for which benefits were previously provided have not given rise to a lump-sum payment. (5) The rights of a person to whom a pension was provided prior to the date of application of this Regulation in a Member State may, at the request of the person concerned, be reviewed, taking into account this Regulation. (6) If a request referred to in paragraph 4 or 5 is submitted within two years from the date of application of this Regulation in a Member State, the rights acquired in accordance with this Regulation shall have effect from that date, and the legislation of any Member State concerning the forfeiture or limitation of rights may not be invoked against the persons concerned. (7) If a request referred to in paragraph 4 or 5 is submitted after the expiry of the twoyear period following the date of application of this Regulation in the Member State concerned, rights not forfeited or not time-barred shall have effect from the date on which the request was submitted, subject to any more favourable provisions under the legislation of any Member State. (8) If, as a result of this Regulation, a person is subject to the legislation of a Member State other than that determined in accordance with Title II of Regulation (EEC) No 1408/71, that legislation shall continue to apply while the relevant situation remains unchanged and in any case for no longer than 10 years from the date of application of this Regulation unless the person concerned requests that he/she be subject to the legislation applicable under this Regulation. The request shall be submitted within 3 months after the date of application of this Regulation to the competent institution of the Member State whose legislation is applicable under this Regulation if the person concerned is to be subject to the legislation of that Member State as of the date of application of this Regulation. If the request is made after the time limit indicated, the change of applicable legislation shall take place on the first day of the following month. (9) Article 55 of this Regulation shall apply only to pensions not subject to Article 46 c of Regulation (EEC) No 1408/71 on the date of application of this Regulation. (10) The provisions of the second sentences of Article 65(2) and (3) shall be applicable to Luxembourg at the latest two years after the date of application of this Regulation. (10 a) The entries in Annex III corresponding to Estonia, Spain, Italy, Lithuania, Hungary and the Netherlands shall cease to have effect 4 years after the date of application of this Regulation. (10 b) The list contained in Annex III shall be reviewed no later than 31 October 2014 on the basis of a report by the Administrative Commission. That report shall include an impact assessment of the significance, frequency, scale and costs, both in absolute and in relative terms, of the application of the provisions of Annex III. That report shall also include the possible effects of repealing those provisions for those Member States which continue to be listed in that Annex after the date referred to in paragraph 10 a. In the light of that report, the Commission shall decide whether to submit a proposal concerning a review of the list, with the aim in principle of repealing the list unless the report of the Administrative Commission provides compelling reasons not to do so. (11) Member States shall ensure that appropriate information is provided regarding the changes in rights and obligations introduced by this Regulation and the Implementing Regulation.

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Article 87 a Transitional provision for application of Regulation (EU) No 465/2012 (1) If as a result of the entry into force of Regulation (EU) No 465/2012, a person is subject, in accordance with Title II of this Regulation, to the legislation of a different Member State than that to which he/she was subject before that entry into force, the legislation of the Member State applicable before that date shall continue to apply to him/her for a transitional period lasting for as long as the relevant situation remains unchanged and, in any case, for no longer than 10 years from the date of entry into force of Regulation (EU) No 465/2012. Such a person may request that the transitional period no longer applies to him/her. Such request shall be submitted to the institution designated by the competent authority of the Member State of residence. Requests submitted by 29 September 2012 shall be deemed to take effect on 28 June 2012. Requests submitted after 29 September 2012 shall take effect on the first day of the month following that of their submission. (2) No later than 29 June 2014, the Administrative Commission shall evaluate the implementation of the provisions laid down in Article 65 a of this Regulation and present a report on their application. On the basis of this report, the European Commission may, as appropriate, submit proposals to amend those provisions. Article 3 Reg. No. 987/2009 Scope and rules for exchanges between the person concerned and institutions (1) Member States shall ensure that the necessary information is made available to the persons concerned in order to inform them of the changes introduced by the basic Regulation and by the implementing Regulation to enable them to assert their rights. They shall also provide for user friendly services. (2) (see under Art. 76) (3) (see under Art. 77) (4) (see under Art. 76) Article 93 Reg. No. 987/2009 Transitional provisions Article 87 of the basic Regulation shall apply to the situations covered by the implementing Regulation. Article 94 Reg. No. 987/2009 Transitional provisions relating to pensions (1) Where the contingency arises before the date of entry into force of the implementing Regulation in the territory of the Member State concerned and the claim for pension has not been awarded before that date, such claim shall give rise to a double award, in as much as benefits must be granted, pursuant to such contingency, for a period prior to that date: (a) for the period prior to the date of entry into force of the implementing Regulation in the territory of the Member State concerned, in accordance with Regulation (EEC) No 1408/71, or with agreements in force between the Member States concerned; (b) for the period commencing on the date of entry into force of the implementing Regulation in the territory of the Member State concerned, in accordance with the basic Regulation. However, if the amount calculated pursuant to the provisions referred to under point (a) is greater than that calculated pursuant to the provisions referred to under point (b), the person concerned shall continue to be entitled to the amount calculated pursuant to the provisions referred to under point (a). (2) A claim for invalidity, old age or survivors’ benefits submitted to an institution of a Member State from the date of entry into force of the implementing Regulation in the territory of the Member State concerned shall automatically necessitate the reassessment of the benefits which have been awarded for the same contingency prior to that date by the institution or institutions of one or more Member States, in accordance with the basic Regulation; such reassessment may not give rise to any reduction in the amount of the benefit awarded.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. General observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Retroactive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Benefits which have not yet been awarded . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Part 2: Regulation (EC) No 883/2004 4. Granting of pensions in transitional cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Review of pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Calculation of pensions in ongoing proceedings. . . . . . . . . . . . . . . . . . c) Protection against the new rules of Reg. No. 883/2004 to prevent overlapping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Transition into the new rules determining the applicable legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Special rules for individual Member States. . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Information obligation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Spirit and Purpose

These provisions are aimed at dealing with the various aspects of transition in particular from the old Reg. No. 1408/71 into Reg. No. 883/2004 (respectively from Reg. No. 574/72 into the IR). It is important to keep in mind the terminology used. The decisive date is: "date of application" of Reg. No. 883/2004, i.e. 1 May 2010, and not the date of entry into force of this regulation (which was, according to its Art. 91, 20 May 2004). These rules are, however, not only of importance for the transition between the two regulations (the old Reg. No. 1408/71 and the new Reg. No. 883/2004), but apply also when at a later stage new States join the EU in relation to facts having occurred in these States before their accession to the EU. Art. 87 corresponds by and large to Article 94 of the old Regulation 1408/71, whereas Art. 94 IR corresponds to Art. 118 of the old Reg. No. 574/72. 2 The transitional provisions are based on the principle that for periods before the date of application of Reg. No. 883/2004 no rights can be acquired pursuant to this regulation (Art. 87(1)). However, facts dating from before that date (e.g. occurrence of invalidity or periods of insurance completed) can be taken into account with legal effects for the future (Art. 87(2)and(3)). Claims for benefits which have been refused on the basis of the old regulation may, on request, be reviewed pursuant to the new regulation (Art. 87(4)). Pension rights which had already been granted may, on request, be reviewed (Art. 87(5)). The procedure for determining pension rights is often stretched out over a longer period. Therefore, Art. 94 IR contains special transitional provisions relating to pensions, according to which the law applicable for the period prior to the date of application of Reg.883/2004 is different than for the period after that date. If a request for reviewing a right to a benefit, which had already been the subject of a decision in the past, is made within two years after the date of application of Reg. No. 883/2004, it has a retroactive effect from that date (Art. 87(6)). Special transitional provisions are made for the modification of the rules determining the applicable legislation (Art. 87(8)), the new rules on overlapping of benefits in the pensions’ chapter (Art. 87(9)) and the special situation of Luxembourg in relation to frontier workers in the unemployment chapter (Art. 87(10)). The commentary of Art. 78 has already dealt with the transitional period for electronic data exchange (Art. 95 IR). 1

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The transitional provisions do not provide an answer to one important 3 question: what happens in cases where the application of the old Reg. No. 1408/71 was more advantageous than Reg. No. 883/2004? This question could arise, for instance, in the field of pensions. Under the old Reg. No. 1408/71 periods during which a person raised a child had to be taken into account by a Member State for determining pension rights even when the person concerned was, at the time of birth of the child, no longer economically active and had transferred her residence to another Member State after that birth (judgment in Case C-28/00, Kauer, EU:C:2002:82). The provision laid down in Art. 44 IR is more restrictive. By virtue of this provision child raising periods have to be taken into account only in cases where the person raising the child was, at the time of birth of the child, subject to the legislation of a Member State on the basis of an economic activity there and where under the legislation of the Member State which later became competent, no child-raising periods are taken into account. How then to assess the situation of a person who has completed her child raising periods before 1 May 2010 and has also transferred her residence to another Member State before that date, but who applies for her pension only in 2020? The transitional provisions do not provide an answer to this question (in this context we have to keep in mind that the child raising periods which have to be taken into account by the non-competent Member State by virtue of Art. 44(2) IR are not periods of insurance completed in that Member State before the date of application of Reg. No. 883/2004 within the meaning of Art. 87(2)). Could then the principle the Court has worked out in its Rönfeldt judgment 4 (Case C-227/89, EU:C:1991:89), be a solution? According to this case law, social security rights previously acquired by a person having moved between states cannot be taken away by a regulation based on Art. 48 TFEU. In the Rönfeldt judgment the Court referred to the so-called Petroni principle, according to which the application of an EU regulation based on Article 48 TFEU cannot have as an effect that a worker loses social security rights acquired on the basis of national law of a Member State. According to the Court this principle also applies to rights acquired on the basis of a bilateral convention concluded between two Member States and incorporated in the national law of these Member States. This case law does not provide an answer to the aforementioned problem, since it does not concern rights acquired on the basis of national law or on the basis of a bilateral convention incorporated in national legislation, but rights which have been created by Union law (precisely the taking into account of child-raising periods completed outside the Member State concerned). Therefore, the European legislature is entitled to change such rights. If for such special cases no corresponding transitional provisions are foreseen, they cannot emerge by the Rönfeldt principle. However, the Rönfeldt judgment continues to be relevant under Reg. No. 883/2004 if a new State joins the EU and this regulation constitutes the first Union law that becomes applicable for this State. Provisions of bilateral conventions which entailed greater advantages for the perRob Cornelissen

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sons concerned than are available under Reg. No. 883/2004 continue, therefore, to apply, provided, however, that the person concerned crossed borders between the two states bound by the bilateral convention before the date that Regulation 883/2004 became applicable to the new Member State (judgment in Case C-475/93, Thevenon, EU:C:1995:371). II. Commentary 1. General observations

The transitional provisions govern the transition from Reg. No. 1408/71 into Reg. No. 883/2004. These provisions are only then of interest, if the relevant rules have changed. Only for such cases must rules be made determining which law applies for which periods. If there is no difference between the two regulations it is of no importance on the basis of which regulation the benefit must be granted; the result will be the same (judgment in Case C- 394/13, “B”). In particular in the fields of pensions and accidents at work/occupational diseases there are hardly any differences between the two regulations. Therefore, the transitional provisions have only secondary importance for these fields. 6 The very detailed transitional provisions reflect general principles which are to be applied even when a modifying regulation does not contain corresponding explicit transitional provisions (judgment in Case 68/69, Brock, EU:C:1970:24). The transitional provisions are not only important for the transition from Reg. No. 1408/71 into Reg. No. 883/2004, they also govern the transition into Union law for new Member States joining the EU. A complicating factor is that the deadlines referred to in Art. 87 have started to run for the Member States on 1 May 2010. However, this date for starting the deadlines is deferred for cases where the regulation became applicable only at a later stage. Let us take as an example the deadline of 10 years referred to in Art. 87(8) which commenced on 1 May 2010. However, for third country nationals this date is deferred until 1 January 2011, the date when Reg. No. 883/2004 became applicable for third country nationals thanks to the entry into force of Reg. No. 1231/2010. For situations covered by the EU/Switzerland agreement the date for starting the aforementioned deadlines is 1 April 2012- date of entry into force of Decision 1/2012 of the Joint Committee EU/Switzerland (O.J. L 103 of 13 April 2012). And for situations covered by the EEA agreement the date for starting the deadlines is 1 June 2012- date of entry into force of Decision 76/2011 of the EEA Joint Committee (O.J. L 263 of 6 October 2011). 5

2. Retroactive effect 7

No rights can be acquired pursuant to Reg. No. 883/2004 for the period before the date of its application (Art. 87(1)). This is in full accordance with the principle of legal certainty precluding a regulation from being applied retroactively (Kauer judgment, Case C-28/00, EU:C:2002:82). Let us take the example 514

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of a person who has only completed periods of insurance as a non-active person (e.g. in a Scandinavian residence based scheme) but these periods are not long enough to acquire entitlement to an old-age pension. Reg. No. 883/2004 extended the personal scope of the regulation to all EU citizens (including non-active persons) who are or who have been insured in a Member State. Thanks to the aggregation provision laid down in Art. 6, this person will be entitled to a pension from 1 May 2010, but not for any period prior to this date, even if the person reached his pensionable age on 1 January 2008. However, rights are acquired under Reg. No. 883/2004, even when it relates 8 to a "contingency" arising before the date of its application (Art. 87(3)). This rule extends the effects of the new regulation into the past, without creating rights for periods prior to its date of application. If, in the aforementioned example the law of the Member State concerned stipulates that a person who has reached the age of 65 is entitled to an old-age pension, this person is, thanks to the aggregation provision, entitled to this pension from 1 May 2010, even if the "contingency" (namely reaching the pensionable age) arose before the 1 May 2010. The Court has clarified that the notion "contingency" is to be interpreted broadly and that it includes all kinds of facts and events, such as an accident, even when the accident was not related at all to work and the regulation in force at that time was only applicable to economically active people (judgment in Case 44/65, Singer, EU:C:1965:122). The Court has emphasized that, of course, also an accident at work which has occurred before the date of application of the new regulation has to be seen as "contingency" within the meaning of the transitional provisions (judgment in Case C-290/00, Duchon, EU:C:2002:234). As to the rules determining the applicable legislation, the exercise of an economic activity before the date of application of the new regulation is a also a "contingency" (judgment in Case 73/72, Bentzinger, EU:C:1973:26), even if the importance of this principle is restricted by the special rule of Art. 87(8)). Becoming unemployed before the date of application of the new regulation is furthermore to be seen as a "contingency" (judgment in Case C-275/96, Kuusijarvi, EU:C: 1998:96), even if this judgment has to be seen in the context of the restriction of the personal scope of Reg. 1408/71 to economically active people (in this case the professional activity was exercised only before the date of application of Union law). Since Reg. No. 883/2004 has extended the scope of the regulation to all EU citizens the importance of this judgment has diminished. These contingencies have to be taken into account, even if at that time the 9 European fundamental freedoms did not apply to the case in question, such as the person having migrated to another State before the accession of the State concerned to the EU, or facts or events having occurred before the introduction of the free movement of non-active persons according to Art. 21 TFEU (corresponding to Art. 18 EC) (aforementioned judgments Kauer and Duchon). But in this way the Court arrives at decisions which are hardly comprehensible from the perspective of the persons concerned. One of the fundamental principles of Rob Cornelissen

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European law, emphasized in the case law of the Court, is that Union citizens cannot be discouraged from, or hindered in exercising their right to free movement- rights conferred upon them by the TFEU. But it would go beyond the meaning of this principle if it could be deduced that it covers also cases like Kauer. Here, a woman was successful in her claim that a Member State should take into account, for the determination of her pension rights under the legislation of that Member State, periods during which she had raised children in another Member State, even if she had transferred her residence to the latter Member State long before the accession of the first Member State to the EU. In fact, Ms Kauer had moved to the other Member State at a time when a possible accession of the first State to the EU was not even on the political agenda. Therefore, there could not have been any question of a possible hindrance in exercising (the not yet existing) right to free movement at the time she transferred her residence to the other State. 10 Art. 87(2) contains a further aspect of retroactive effect: any periods of insurance or other relevant periods completed before the date of application of the regulation must be taken into account for the purposes of applying the regulation. Even if, according to the letter of this provision, these periods only have to be taken into account for the "determination of rights", it can be deduced that this retroactive effect also covers the calculation of a benefit. Art. 87(2) means, for instance, that for pension applications submitted by a EU national after 1 May 2010, all periods of insurance, completed in any Member State have to be taken into account under Art. 6, regardless of whether these periods were completed before or after 1 May 2010. For persons who have lost the nationality of a Member State during their career, periods completed in any Member State while they were a national of a Member State, have to be taken into account. In other words, the requirement as to the nationality of a Member State within the meaning or Art. 2(1) must be satisfied while the periods of insurance were completed (judgment in Case 10/78, Belbouab, EU:C:1978:181). 3. Benefits which have not yet been awarded

If a benefit has not been awarded or has been suspended before the date of application of Reg. No. 883/2004 by reason of the nationality or residence of the person concerned, this person may request that this benefit is provided or resumed under Reg. No. 884/2004. If the request is made within 2 years after the date of application of this Regulation, the benefit will be provided or resumed retroactively from the date of application of the regulation (Art. 87(6). 12 This provision is important in particular for those cases where under national law a new decision would be inadmissible because of res judicata. The retroactive effect referred to in Art. 87(6) applies even if the national rules of the Member State concerned foresee shorter periods of limitation. Therefore, Art. 87(6) creates European procedural law. If the request referred to in Art. 87(4) is made after the period of 2 years, the benefit will be provided or resumed from the date 11

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the request was made or, if national law is more advantageous, from the earlier date foreseen by national law (Art. 87(7)). This means that Art. 87(7) does not create European procedural law - any rules of limitation or exclusion foreseen by national law can be applied. If in the past entitlements to a benefit have been exchanged for a lump sum payment, Art. 87(4) does not apply since in such cases the quid pro quo has already been paid and a renewed entitlement cannot be opened by Reg. No. 883/2004. There will probably not be many cases where these rules are of importance 13 for the transition between Reg. No. 1408/71 and Reg. No. 883/2004. For Art 87(4) to apply there must have been a refusal or a suspension of a benefit by reason of the nationality or residence of the person concerned. Even before the application of Reg. No. 883/2004 direct discrimination based on nationality or indirect discrimination on the basis of residence (judgment in Case C-111/91, Commission versus Luxembourg, EU:C:1993:92) was forbidden by Union law. Such discrimination was forbidden not only concerning benefits falling under the scope of Reg. No. 1408/71 but also (for EU citizens who had made use of their right to free movement within the meaning of Art. 21 TFEU) concerning benefits falling outside its scope (judgments in Case C-192/05, Tas Hagen, EU:C:2006:676, Case C-499/06, Nerkowska, EU:C:2008:300 and Case C-221/07, Zablocka, EU:C:2008:681). Therefore, it can be concluded that these special transitional provisions concern mainly cases where a new State joins the EU and thereby Union law as a whole (including Reg. No. 883/2004) becomes applicable at a later stage. 4. Granting of pensions in transitional cases a) Review of pensions

Pensions which had already been determined in a Member State before the 14 date of application of Reg. No. 883/2004 may, at the request of the person concerned, be reviewed taking into account this regulation. It is not required that the final decision of granting the pension had already been made before the date of application of Reg. No. 883/2004. This rule also applies if the person concerned had brought proceedings before a national court against the decision of the institution and the proceedings were still pending at the date of application of the new regulation (judgment in joined Cases C-52/99 and C-53/99, Camarotto and Vignone, EU:C:2001: 112). If the relevant request is made within two years after the date of application of Reg. No. 883/2004, the pension is reviewed from the date of application of the regulation; if made after two years, the pension is reviewed according to the national rules of limitation and exclusion (Art. 87(6) and (7)). This rule too applies both for cases of transition between Reg. No. 1408/71 and 883/2004 and for cases where a new State joins the EU at a later stage. However, in order to trigger the legal effects of this rule an explicit request for review is required. Other requests made under national law or under

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the old Reg. No. 1408/71 (e.g. a request to modify the decision awarding the pension by asserting that Reg. No. 1408/71 had been wrongly applied), cannot lead to the application of Art. 87, in particular not the retroactive effect rule laid down in its para. 6 (judgment in Case C-118/00, Larsy, EU:C:2001:368). 15 Since the definition of "pension" of Art. 1(w) is not related to a specific risk, these transitional provisions cover not only old-age, invalidity and survivors' pensions but also pensions for accidents at work and occupational diseases. These rules too contain European procedural law, going beyond the national law concerned, since it foresees the review of legally definitive decisions. These rules do not touch, however, upon the question of which national rules have to be applied on such a request for review. This question has to be determined in accordance with national law. Let us take as an example a person who receives an old-age pension from a Member State whose national legislation stipulates that later modifications in law (e.g. a new calculation formula) are not to be taken into account for ongoing pensions. If this person submits a request for review of his pension in accordance with Art. 87(5), this pension has to be reviewed taking into account Reg. No. 883/2004 (e.g. by taking into consideration periods of insurance completed in another Member State). Such a review will, however, be made while taking into account the initial calculation formula of the Member State concerned. 16 Such a request for review only makes sense when the application of Reg. No. 883/2004 would be more advantageous for the person concerned than Reg. No. 1408/71. The aim of this transitional provision is to give a person to whom a pension has been awarded under the old regulation the right to request the review, in his favor, of such a pension. Therefore, the institution does not have the power to review the pension on its own initiative (judgment in Case 32/76, Saieva, EU:C:1976:136). Precisely in the field of pensions and accidents at work there are hardly any substantial changes between Reg. No. 1408/71 and Reg. No. 883/2004. Therefore, there have been relatively few reviews according to Art. 87(5) after 1 May 2010. The main importance of these rules primarily concerns new States having joined or who are going to join the EU after 1 May 2010. In its Decision P1 of 12 June 2009 (O.J. C 106 of 24 February 2010) the Administrative Commission decided that when a person makes an application for the review of an invalidity pension according to Art. 87(5), it shall not be necessary to carry out a new medical examination, if the information contained in the beneficiary's file can be regarded as adequate. b) Calculation of pensions in ongoing proceedings 17

Art. 94 IR deals with a special transitional case. If a pension application has been made before the date of application of Reg. No. 883/2004 (e.g. 15 January 2010) and if this application results in the granting of a pension after the date of application of Reg. No. 883/2004 but starting from a date before the date of this regulation (e.g. 1 February 2010) then the pension will be calculated in two 518

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steps. For periods prior to the date of application of Reg. No. 883/2004 the pension has to be determined in accordance with the old law (for States who were Member States before 1 May 2010 the old law was Reg. No. 1408/71). For periods commencing on the date of application of Reg. No. 883/2004 the pension has to be determined in accordance with this regulation, unless this pension is lower than the pension calculated according to Reg. No. 1408/71 (e.g. because child raising periods are no longer taken into account in accordance with Art. 44 IR). In that case the person concerned continues to be entitled to the pension calculated in accordance with Reg. No. 1408/71. This provision too is applicable to all "pensions" (old-age, invalidity, survivors', accidents at work and occupational diseases). Art. 94(2) IR contains a special rule for cases where a person submits, after 18 the date of application of Reg. No. 883/2004, a claim (not necessarily a request for a review) in a Member State for an old-age, an invalidity or a survivors' pension (but not a pension for accidents at work or occupational diseases) and where such a pension (or pensions) was (were) already provided in another (or other) Member State(s) before the day of application of the aforementioned regulation. In such cases an automatic reassessment of the pension(s) previously provided in the other Member State(s) concerned is carried out. Such reassessment cannot give rise to any reduction in the amount of the pension awarded. In such cases the person concerned continues to be entitled to the amount of the pension(s) previously provided by the other Member State(s). Unfortunately Art. 94(2) IR does not stipulate explicitly that the review has a retroactive effect from the date of application of Reg. No. 883/2004. Therefore, in order to benefit from the retroactive effect referred to in Art. 87(6) the persons concerned must make a request for a review as stipulated by Art. 87(5). Given the fact that there is hardly any difference between Reg. No. 1408/71 19 and Reg. No. 883/2004 in the field of pensions, the importance of Art. 94 IR mainly concerns cases where a new State joins the EU after 1 May 2010. c) Protection against the new rules of Reg. No. 883/2004 to prevent overlapping

One of the very few changes made in chapters "invalidity benefits" and "old- 20 age and survivors' pensions" of Reg. No. 883/2004 in comparison with Reg. No. 1408/71 concerns the rules to prevent overlapping, in particular the overlapping of benefits of a different kind (see commentary Art. 55). For the persons concerned these rules are less advantageous than the rules previously laid down in Art. 46 c of Reg. No. 1408/71. Therefore, Art. 87(9) stipulates that the rules of Art. 55 only apply to new cases, i.e. cases on which Art 46 c of Reg. No. 1408/71 has not been applied “on the date of application” of Reg. No. 883/2004. It is not entirely clear which cases could fall under Art. 87(9). It certainly covers cases where the person concerned was in receipt of benefits of a different kind, or of other income, before, on and after the date of application of Reg. No. 883/2004. But how to assess a case where a person was in receipt of a Rob Cornelissen

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benefit of a different kind between 1 January 2010 and 15 March 2010, triggering the application of Art. 46 c of Reg. No. 1408/71, and where this person again started to receive such benefits from 1 June 2010? It can be argued that, since in this concrete case Art. 46 c of Reg. No. 1408/71 was not applied to the pension on the date that Reg. No. 883/2004 became applicable, Art. 87(9) does not apply, and that therefore Art. 55 can be applied. However, the opposite opinion is also defensible, namely that in a general way all pensions awarded before the date of application of Reg. No. 883/2004 were in theory subject to Art. 46 c of Reg. 1408/71 and that therefore Art. 55 can never be applied to such pensions, regardless of whether, on the date of application of Reg. No. 883/2004, benefits of a different kind were indeed received or not. 5. Transition into the new rules determining the applicable legislation

Art. 87(8) contains a special arrangement for the transition of Reg. No. 1408/71 into Reg. No. 883/2004 concerning the rules which determine the applicable legislation (Title II of both regulations). Contrary to the preceding paragraphs of Art. 87, Art. 87(8) does not apply to cases where a new State joins the EU. In such cases the rules laid down in Title II of Reg. No. 883/2004 will apply from the day of accession. In the original version of Reg. No. 883/2004 it was foreseen that the legislation which was the applicable one by virtue of Title II of Reg. No. 1408/71, would continue to apply after the date of application of Reg. No. 883/2004 as long as the relevant situation remained unchanged, without any limitation in the time. The exception would be if the person concerned submits a request that he be subject to the legislation determined as the applicable one by Reg. No. 883/2004. The aim of this provision was to avoid multiple changes of applicable legislation as a result of differences between the rules determining the applicable legislation of the two regulations, in cases where the relevant situation of the person concerned had not changed at all. The first regulation that modified Reg. No. 883/2004, namely Reg. No. 988/2009 (O.J. L 284 of 30 October 2009), which entered into force even before Reg. No. 883/2004 became applicable, has, however, inserted a limitation in time in Art. 87(8). This means that, if as a result of the new rules of Title II of Reg. No. 883/2004 a person would be subject to the legislation of a Member State other than the one determined in accordance with Reg. No. 1408/71, the legislation applicable by virtue of Reg. No. 1408/71 continues to apply for a maximum period of ten years, as long as the relevant situation remains unchanged. The only exception would be if the person concerned should request to be subject to the legislation of the Member State determined as the competent one by Reg. No. 883/2004. 22 According to the wording of the provision, Art. 87(8) only applies if the applicable legislation had been determined by a rule laid down in Title II of Reg. No. 1408/71. There are, however, also rules in Title III which determine, for specific branches of social security, the applicable legislation. In accordance with Art. 71 (Title III) of Reg. No. 1408/71, for instance, wholly unemployed 21

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frontier workers had to look for work exclusively in the Member State of residence and they were entitled to receive unemployment benefits exclusively in that State. It constituted a derogation from the general rule laid down in Art. 13 (Title II) of Reg. No. 1408/71 according to which a worker employed in a Member State was subject to the legislation of that State (lex loci laboris). In the famous Miethe judgment (Case 1/85, EU:C:1986:243) the Court had ruled that frontier workers who had maintained close professional and family ties with the State of last employment might have better chances to find new work in the Member State of last employment. Such ‘atypical frontier workers’ could choose to make themselves available to the employment services in the State of last employment and claim unemployment benefit there. Art. 65 of Reg. No. 883/2004 has replaced Art. 71 of Reg. No. 1408/71 by partially amending its content. In fact, all wholly unemployed frontier workers now have the right to make themselves also available, as a supplementary step, to the employment services in the State of last employment. But it is the Member State of residence who is competent for paying unemployment benefits to wholly unemployed frontier workers. In the Jeltes Case (Case C-443/11, EU:C:2013:224), the Court was asked whether the Miethe judgment is still applicable under the new rules of Reg. No. 883/2004. According to the Court it is not. Atypical frontier workers no longer have the possibility to claim unemployment benefits from the State of last employment. Two of the persons involved in this case were frontier workers residing in a 23 neighbouring State but working in the Netherlands. When they became unemployed in 2009 they claimed and received, as atypical frontier workers, unemployment benefits from the Netherlands. They found a new job before 1 May 2010 (date of application of Reg. No. 883/2004). The social security institution terminated payment of the unemployment benefit while informing the persons concerned that they were entitled to the resumption of the payment if they found themselves unemployed again within a certain period of time. At the end of 2010 they lost their new job and they claimed once again unemployment benefits from the Netherlands. The Dutch institution, however, refused to pay the benefits because it argued that under Art. 65 of Reg. No. 883/2004 the Miethe Case law was no longer applicable. The Court agreed with this argument. The Court then had to make a decision on the question whether, under such circumstances, Art. 87(8) should be interpreted as meaning that the workers concerned may continue to receive unemployment benefits from the State of last employment. The Court ruled that, given the clear wording of the provision, Art. 87(8) was not directly applicable, since the applicable legislation for unemployment benefits to wholly unemployed frontier workers was determined not by Title II but by Art. 71 (Title III) of Reg. No. 1408/71. According to the Court, the lack of any transitional provision applicable to wholly unemployed frontier workers who were under Reg. No. 1408/71 considered as ‘atypical frontier workers’, had to be seen as a lacuna which arose during the legislative process and not as the Rob Cornelissen

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deliberate intention of the legislature to make such workers immediately subject to the legislation of the State of residence. Therefore, Art. 87(8) should be applied by analogy. 24 It is not always clear what is to be understood by the notion: "as long as the relevant situation remains unchanged". This notion is not defined by the regulation. The Administrative Commission has in part IV ("Transitional provisions") of the “Practical Guide on the applicable legislation in the EU, the EEA and in Switzerland", clarified this notion. A change in the relevant situation refers to the factual situation of the person concerned, or his employer, which would also under the old Reg. No. 1408/71 have led to a change in applicable legislation. As a rule, a change of employer, the termination of the contract with one or more employers or a cross-border transfer of residence constitutes a change of the relevant situation. However, there is no change in the relevant situation if a person who, since 2008, works for one employer in two Member States and who reduces after 1 May 2010 his activities in the Member State of residence from 50% to 10% of his working time. In fact, this reduction in working time would not have led to a change in applicable legislation under Art. 14(2)(b)(i) of Reg. No. 1408/71. 25 However, the usefulness of this valuable clarification has been put into question by the Court's judgment in the Jeltes Case (C-443/11, EU:C:2013:224). Surprisingly, the Court ruled that the concept of "unchanged situation" must be interpreted by reference to the definition given to it by national social security legislation. Therefore, it was for the Dutch court to determine, whether the wholly unemployed frontier workers concerned fulfilled the conditions provided for by Dutch legislation for entitlement to a resumption of the payment of the unemployment benefit, irrespective of the entry into force of Reg. No. 883/2004. The Court did not indicate that this reference to the national legislation in order to define the concept of "unchanged situation", should apply only in cases where the transitional provision had been ‘forgotten’ and where consequently Art. 87(8) had to be applied by analogy. On the contrary, the Court ruled in general terms that the concept of "unchanged situation" within the meaning of Art. 87(8) must be assessed in the light of national social security legislation. This judgment risks having as a result that the notion "unchanged situation" is interpreted and applied in different ways in the various Member States. It should be taken as an appeal to the legislature to insert a definition of this notion in the Regulation. 26 The special transitional provision laid down in Art. 87(8) is not compulsory. In fact, the person concerned has the possibility to submit a request to be subject to the legislation of the Member State determined as being competent by Reg. No. 883/2004 at any time. If this request was made within three months after 1 May 2010 (i.e. before 1 August 2010), this request had a retroactive effect from 1 May 2010. If the request is made after 31 July 2010, the change of applicable legislation takes place on the first day of the month following the request.

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Since 1 May 2010 the rules determining the applicable legislation, laid down 27 in Reg. No. 883/2004 and in the IR, have been the subject of some substantial changes effectuated by Regulation (EU) No 465/2012 of 22 May 2012 (O.J. L 149 of 8 June 2012). These changes concern, in particular, persons who normally work in two or more Member States. Reg. No. 465/2012 has introduced the concept of "home base" as the decisive element for the determination of applicable legislation for flight crew and cabin crew members. These changes in the substantial rules of Title II have required the insertion of Art. 87 a in Reg. No. 883/2004 containing transitional provisions for the application of Reg. No. 465/2012. These provisions are based on the same principles as Art. 87(8). Obviously, the transitional period of ten years referred to in Art. 87 a only started to run on the day that Reg. No. 465/2012 entered into force (i.e. 28 June 2012) and will end on 28 June 2022. 6. Special rules for individual Member States

Art. 87(10) was part of the compromise which was at the very last minute 28 reached in Council on the chapter "unemployment benefits" of the regulation (see commentary Art. 86). By virtue of Art. 65(2) a wholly unemployed frontier worker can, as a supplementary step, also make himself available to the employment services of the State of last employment. This right of the unemployed person corresponds to his duty to comply with the obligations applicable in the State of last employment (Art. 65(3)). Because of the disproportionately high number of frontier workers residing in neighbouring States but working in Luxembourg, the aforementioned right/duty of the wholly unemployed frontier worker became only applicable to Luxembourg on 1 May 2012 rather than 1 May 2010. Art. 87(10 a) and (10 b), inserted in Reg. No. 883/2004 by Reg. No. 988/2009, 29 concern Annex III of the regulation. Family members of a frontier worker employed in a Member State listed in Annex III, are only entitled to benefits in kind in that Member State which are necessary on medical grounds, whereas family members of frontier workers employed in a Member State not listed in Annex III are entitled to all benefits in kind in the State where the frontier worker is employed (see commentary on Articles 18 and 19). Since 1 May 2014 the entries of Estonia, Spain, Italy, Lithuania, Hungary and the Netherlands in Annex III are no longer valid by virtue of Art. 87(10 a). As to the remaining entries in Annex III (Croatia, Denmark, Ireland, Finland, Sweden and the UK), Art. 87(10 b) requires a review no later than 31 October 2014 on the basis of a report of the Administrative Commission that includes an evaluation of the functioning of this Annex. In the light of that report the European Commission has to decide whether to submit a proposal concerning a review of that list, with the aim in principle of repealing the list, unless the report of the Administrative Commission provides compelling reasons not to do so.

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7. Information obligation 30

Art. 87(11) charges Member States with the task of ensuring that the appropriate information is provided regarding the changes in rights and obligations introduced by Reg. No. 883/2004 and the IR. This information obligation is actually already covered by Art. 89 IR. Curiously enough the provision laid down in Art. 87(11) is repeated in Art. 3(1) IR. Apart from the requirement that Member States should provide "user friendly services" (Art. 3(1) IR), there is no indication as to the way the information has to be made available. The institutions and bodies concerned mostly do not have comprehensive knowledge about all individual cases which could possibly arise. Therefore, it is assumed that Member States can discharge their obligation to provide information by distributing leaflets, by information campaigns in media, by providing information to interest groups (e.g. organizations of pensioners). The mere fact that in an individual case the information has not reached the person concerned cannot have as an effect that the deadlines referred to in Art. 87(6) and (7) are no longer applicable. 8. Evaluation

31

The task to evaluate referred to in Art. 87a(2) has been inserted by Reg. No. 465/2012 and was part of the compromise which was reached in Council on the new Art. 65 a (special provisions for wholly unemployed self-employed frontier workers).

Article 88 Updating of the Annexes The Annexes of this Regulation shall be revised periodically. Article 92 Reg. No. 987/2009 Amendment of the Annexes Annexes 1, 2, 3, 4 and 5 to the implementing Regulation and Annexes VI, VII, VIII and IX to the basic Regulation may be amended by Commission Regulation at the request of the Administrative Commission.

1

A permanent updating of the annexes is necessary in order to take into account the developments in national legislation of the Member States and in the case law of the Court (e.g. about the validity of entries in an annex: judgment in Case C-299/05, Commission versus Council and Parliament, EU:C:2007:608). In order to accelerate the procedure Art. 92 IR stipulates that Annexes VI, VII, VIII and IX of Reg. No. 883/2004, and all the annexes of the IR may be amended by a Commission Regulation at the request of the Administrative Commission. Annex VI of Reg. No. 883/2004 identifies the type of legislation concerning invalidity which should be subject to the special coordination system referred to in Art. 44(1). Annex VII identifies the concordance between the legislations of the Member States on conditions relating to the degree of invalidity referred to in Art. 46(3). Annex VIII lists the cases where the pro-rata calcula-

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tion can be waived because the independent benefit is always equal to or higher than the pro-rata benefit (Art. 52(4)) as well as the cases where the pro-rata calculation does not apply because the duration of the periods of insurance do not have any relevance to the calculation of the benefit (Art. 52(5)). Annex IX lists the benefits and agreements which allow the application of Art. 54 (enabling, in the field of pensions, the application of national rules aimed at preventing overlapping). The politically more delicate annexes of Reg. No. 883/2004, in particular annex X (listing the "special non-contributory benefits" within the meaning of Art. 70(2)(c)) and annex XI (special provisions for the application of the legislation of the Member States) have to be modified in accordance with the legislative procedure foreseen by Art. 48 TFEU.

Article 89 Implementing Regulation A further Regulation shall lay down the procedure for implementing this Regulation.

The Implementing Regulation referred to in Art. 89 has become Regulation (EC) No 987/2009. This Regulation contains numerous additional clarifications and lays down the procedures for the implementation of Reg. No. 883/2004. Its entry into force has automatically led to Reg. No. 883/2004 becoming applicable (Art. 91 second sentence). Legally the IR is on the same footing as Reg. No. 883/2004.

Article 90 Repeal (1) Council Regulation (EEC) No 1408/71 shall be repealed from the date of application of this Regulation. However, Regulation (EEC) No 1408/71 shall remain in force and shall continue to have legal effect for the purposes of: (a) Council Regulation (EC) No 859/2003 of 14 May 2003 extending the provisions of Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 to nationals of third countries who are not already covered by those provisions solely on the ground of their nationality, for as long as that Regulation has not been repealed or modified; (b) Council Regulation (EEC) No 1661/85 of 13 June 1985 laying down the technical adaptations to the Community rules on social security for migrant workers with regard to Greenland, for as long as that Regulation has not been repealed or modified; (c) the Agreement on the European Economic Area and the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, on the free movement of persons and other agreements which contain a reference to Regulation (EEC) No 1408/71, for as long as those agreements have not been modified in the light of this Regulation.

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Part 2: Regulation (EC) No 883/2004 (2) References to Regulation (EEC) No 1408/71 in Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community are to be read as referring to this Regulation.

Article 91 Entry into force This Regulation shall enter into force on the 20th day after its publication in the Official Journal of the European Union. It shall apply from the date of entry into force of the Implementing Regulation. This Regulation shall be binding in its entirety and directly applicable in all Member States Article 96 Reg. No. 987/2009 Repeal (1) Regulation (EEC) No 574/72 is repealed with effect from 1 May 2010. However, Regulation (EEC) No 574/72 shall remain in force and continue to have legal effect for the purposes of: (a) Council Regulation (EC) No 859/2003 of 14 May 2003 extending the provisions of Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 to nationals of third countries who are not already covered by those provisions solely on the grounds of their nationality, until such time as that Regulation is repealed or amended; (b) Council Regulation (EEC) No 1661/85 of 13 June 1985 laying down the technical adaptations to the Community rules on social security for migrant workers with regard to Greenland, until such time as that Regulation is repealed or amended; (c) the Agreement on the European Economic Area, the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons and other agreements containing a reference to Regulation (EEC) No 574/72, until such time as those agreements are amended on the basis of the implementing Regulation. (2) In Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community, and more generally in all other Community acts, the references to Regulation (EEC) No 574/72 shall be understood as referring to the implementing Regulation. Article 97 Reg. No. 987/2009 Publication and entry into force This Regulation shall be published in the Official Journal of the European Union. It shall enter into force on 1 May 2010. This Regulation shall be binding in its entirety and directly applicable in all Member States.

These final provisions repeal, in two different provisions, Reg. No. 1408/71 (Art. 90) and Reg. No. 574/72 (Art. 96 IR). Of course, a solution had also to be found for cases where other Union legislation referred to the old regulations, as long as that legislation had not yet replaced such reference by a subsequent one. As to that other legislation the legislature opted for two distinct approaches. Regarding Reg. No. 859/2003 (extending the scope of Reg. No. 1408/71 to third country nationals, O.J. L 124 of 20 May 2003), Art. 90(1) stipulates that Reg. No. 1408/71 and 574/72 continue to apply for as long as that regulation has not been repealed or modified. The same is true for Reg. No. 1661/85 concerning Greenland (O.J. L 160 of 20 June 1985), the EEA Agreement (O.J. L 1 of 3 January 1994) and the EU/Switzerland Agreement on free movement of persons (O.J. L 14 of 30 April 2002). 2 Since the entry into force of Reg. No. 1231/2012 (extending the scope of Reg. No. 883/2004 to third country nationals) the reference to Reg. No. 859/2003 is 1

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only of importance in cases in which the UK is involved (see commentary on Art. 2). Art. 90(1)(c) is no longer of importance for the EU/Switzerland agreement since 1 April 2012, the date of entry into force of Decision 1/2012 of the Joint Committee EU/Switzerland of 31 March 2012 (O.J. L 103 of 13 April 2012) making the new Regulations also applicable for the EU/Switzerland relations. The same is true for the EEA agreement since 1 June 2012, the date of entry into force of Decision 76/2011 of the EEA Joint Committee of 1 July 2011 (O.J. L 262 of 6 October 2011) making the new Regulations also applicable for the EEA. The references to the old Reg. No. 1408/71 and 574/72 in Directive 98/49/EC 3 on safeguarding supplementary pensions (O.J. L 209 of 25 July 1998) have been automatically replaced by the corresponding references to Reg. No. 883/2004 and 987/2009 (Art. 90(2) and Art. 96(2) IR). Art 90 has not given an explicit solution for references to the old Reg. No. 1408/71 in other Union legislation (e.g. Art. 12 of Directive 2005/71/EC concerning third country national researchers, O.J. L 289 of 3 November 2005), contrary to Art. 96(2) IR which stipulates in a general way that " more generally in all other Community acts, the references to Regulation (EEC) No 574/72 shall be understood as referring to the Implementing Regulation". It is to be assumed, however, that even without such an explicit wording in Art. 90, the references to Reg. No. 1408/71 have been automatically replaced by references to Reg. No. 883/2004. In a number of cases the old Reg. No. 1408/71 and 574/72 continue to apply, 4 sometimes for a very long time. This is true in particular for third country nationals who have moved between Member States (except Denmark), if one of these Member States is the UK. Superfluous to say that this is not a satisfactory situation for all parties involved.

Special rules of the IR Article 6 Reg. No. 987/2009 Provisional application of legislation and provisional granting of benefits (1) Unless otherwise provided for in the implementing Regulation, where there is a difference of views between the institutions or authorities of two or more Member States concerning the determination of the applicable legislation, the person concerned shall be made provisionally subject to the legislation of one of those Member States, the order of priority being determined as follows: (a) the legislation of the Member State where the person actually pursues his employment or self-employment, if the employment or self-employment is pursued in only one Member State; (b) the legislation of the Member State of residence if the person concerned pursues employment or self-employment in two or more Member States and performs part of his/her activity or activities in the Member State of residence, or if the person concerned is neither employed nor self-employed; (c) in all other cases, the legislation of the Member State, the application of which was first requested if the person pursues an activity, or activities, in two or more Member States. (2) Where there is a difference of views between the institutions or authorities of two or more Member States about which institution should provide the benefits in cash or in kind, the person concerned who could claim benefits if there was no dispute shall be entitled, on a provisional basis, to the benefits provided for by the legislation applied by the institution of his place of residence or, if that person does not reside on the territory of one of the Member States concerned, to the benefits provided for by the legislation applied by the institution to which the request was first submitted. (3) Where no agreement is reached between the institutions or authorities concerned, the matter may be brought before the Administrative Commission by the competent authorities no earlier than one month after

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Part 2: Regulation (EC) No 883/2004 the date on which the difference of views, as referred to in paragraph 1 or 2 arose. The Administrative Commission shall seek to reconcile the points of view within six months of the date on which the matter was brought before it. (4) Where it is established either that the applicable legislation is not that of the Member State of provisional membership, or the institution which granted the benefits on a provisional basis was not the competent institution, the institution identified as being competent shall be deemed retroactively to have been so, as if that difference of views had not existed, at the latest from either the date of provisional membership or of the first provisional granting of the benefits concerned. (5) If necessary, the institution identified as being competent and the institution which provisionally paid the cash benefits or provisionally received contributions shall settle the financial situation of the person concerned as regards contributions and cash benefits paid provisionally, where appropriate, in accordance with Title IV, Chapter III, of the implementing Regulation. Benefits in kind granted provisionally by an institution in accordance with paragraph 2 shall be reimbursed by the competent institution in accordance with Title IV of the implementing Regulation. Article 7 Reg. No. 987/2009 Provisional calculation of benefits and contributions (1) Unless otherwise provided for in the implementing Regulation, where a person is eligible for a benefit, or is liable to pay a contribution in accordance with the basic Regulation, and the competent institution does not have all the information concerning the situation in another Member State which is necessary to calculate definitively the amount of that benefit or contribution, that institution shall, on request of the person concerned, award this benefit or calculate this contribution on a provisional basis, if such a calculation is possible on the basis of the information at the disposal of that institution. (2) The benefit or the contribution concerned shall be recalculated once all the necessary supporting evidence or documents are provided to the institution concerned.

I. Spirit and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Provisional competence for the applicable legislation . . . . . . . . . . . . . . . 2. Provisional competence for granting benefits . . . . . . . . . . . . . . . . . . . . . . . . 3. Provisional calculation of benefits and contributions . . . . . . . . . . . . . . . . 4. Conciliation procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Retroactive settlement following the final decision. . . . . . . . . . . . . . . . . .

1 2 2 8 11 14 15

I. Spirit and Purpose 1

The commentary on these provisions is based on the commentary of Bernhard Spiegel published in the original German version by NOMOS. In spite of the objective of Reg. No. 883/2004 to simplify things, the coordination system set up by the current regulations continues to be a complicated matter. The procedures for determining the competent Member State or for calculating benefits are sometimes time-consuming. In order to avoid the resulting drawbacks for the persons concerned, a number of measures have been created which are available at short notice. Articles 6 and 7 IR contain a number of provisions aimed at the provisional application of legislation, the provisional payment of contributions and the provisional granting of benefits. These provisions are much more detailed and comprehensive than the rudimentary rules which were previously laid down in Art. 114 of the old Reg. No. 574/72.

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II. Commentary 1. Provisional competence for the applicable legislation

Art. 6(1) IR applies to cases with differing views between the institutions or 2 authorities of two or more Member States concerning the determination of the applicable legislation. For such cases it determines the provisionally competent Member State by means of a clear order of priority. This means that Art. 6(1)(b) IR is relevant only if Art. 6(1)(a) IR does not apply and that Art. 6(1)(c) IR is only relevant if neither Art. 6(1)(a) nor Art. 6(1)(b) IR applies. A person who pursues an activity as an employed or self-employed person in 3 only one Member State is provisionally subject to the legislation of this Member State (Art. 6(1)(a) IR). In cases where the activity is exercised in only one Member State, differing views about the determination of the applicable legislation will be restricted to rare situations. It might happen in a case where one Member State is of the opinion that a person working in a Member State is a posted worker within the meaning of Art. 12(1), whereas the other Member State involved has the view that the conditions of Art. 12(1) are not fulfilled. But even then, Art. 6(1)(a) IR applies only in cases of a negative conflict of competence, where the sending State is of the opinion that the person concerned is not a posted worker (e.g. because the employer does not perform any substantial activities in the sending State), whereas the host State has the view that the posting conditions are fulfilled. In such a case, the legislation of the host State is provisionally applicable by virtue of Art. 6(1)(a) IR. In cases of a positive conflict of competence Art. 6(1)(a) IR does not apply. In fact, if the institution of the sending State is of the opinion that the conditions of Art. 12(1) are fulfilled, it will normally issue portable document A1, in accordance with Art. 19(2) IR, which binds the institution of the host State and thus excludes the provisional application of the legislation of the host State (Art. 5 IR). If the institutions concerned disagree in such cases of a positive conflict of competence, they have to follow the dialogue and conciliation procedure referred to in Art. 5(2)to(4) IR (see commentary on Art. 72(a)). If the person concerned pursues one or more activities in two or more Mem- 4 ber States (Art. 13), and performs a part of the activities in the Member State of residence, or if the person concerned is not economically active at all, then he is provisionally subject to the legislation of the Member State of residence by virtue of Art. 6(1)(b) IR. For persons who pursue activities in two or more Member States, the provisional competence of the Member State of residence is actually a prolongation of the procedure foreseen by Art. 16 IR which refers explicitly (in its par 4) to Art. 6 IR. Art. 6(1)(b)IR is applicable in particular in cases where the institutions have differing views on the question whether or not the person concerned performs a "substantial part" of his/her activities within the meaning of Art. 13(1)(a) in the Member State of residence. For non-active people Art. 6(1)(b) IR does not have any real added value, since these people are in Rob Cornelissen

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any case subject to the legislation of the Member State of residence by virtue of Art. 11(3)(e). Art. 6(1)(b) is not aimed at solving differing views about the determination of the residence of non-active people, which is the subject of the special rule of Art. 11 IR. 5 If the person pursues one or more activities in two or more Member States, but not at all in the Member State of residence, he is, in case of differing views between the institutions about the determination of the applicable legislation, provisionally subject to the legislation of the Member State the application of which was first requested (Art. 6(1)(c) IR). A person who resides in Member state A, but who performs activities in Member States B and C can, in case of difference of views between the institutions involved about the determination of the applicable legislation, steer the provisional competence by requesting the application of the legislation of the Member State of his own choice. According to the letter of the provision, the choice of the person is unlimited, allowing even the provisional application of the legislation of a Member State with which the person does not have any connection at all (e.g. Member State D). However, a teleological interpretation of the provision leads to the conclusion that the application should be made only in a Member State whose legislation could, in the concrete case, hypothetically be considered as the applicable one in accordance with Title II. 6 If a person performs one or more activities in two or more Member States (Art. 13), would it be possible for one of the institutions involved to face the other institution(s) with a fait accompli by issuing the portable document A1 (Art. 19(2) IR) and thereby binding the other institution(s) by virtue of Art. 5 IR? It can be deduced from the special procedure laid down in Art. 16 IR for the application of Art. 13, that this question should be answered in the negative. In fact, Art. 16(4) IR clarifies that, where there is a difference of views between the institutions, the dialogue procedure turns into the provisional competence in accordance with Art. 6 IR. This means that in cases where Art. 13 applies, the portable document A1 can be issued only if the determination of the applicable legislation by the designated institution of the place of residence has not been contested by any of the other institutions involved (Art. 16(2)and(3) IR), or if the competence has been definitively been determined in the framework of Art. 6 IR. Over and above that, the institution that is provisionally competent in accordance with Art. 6 IR must be able to issue, on a provisional basis, the attestation referred to in Art. 19(2) IR having a binding effect for the other institutions. 7 The Member State whose legislation is provisionally competent has, on a provisional basis, to collect contributions and to grant benefits in accordance with its legislation. In fact, since the differing views are on the determination of the applicable legislation and not on the benefits as such, Art. 6(2) IR does not apply. Where it is later established that the definitely applicable legislation is not that of the Member State of provisional membership, the two institutions in-

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volved have to settle the financial situation of the person concerned regarding contributions and benefits (Art. 6(5) IR). 2. Provisional competence for granting benefits

Art. 6(2) IR deals with another situation of differing views, namely those cas- 8 es where it is not disputed which Member State is competent, but where it is not clear which Member State has to provide benefits. This provision applies only if there are no special rules available concerning the provisional granting of benefits in cases of differing views about the competence, such as Art. 37 IR (provisional benefits for occupational diseases) or Art. 60(3) IR (provisional family benefits). Therefore, Art. 6(2) IR will not be applied very often. It could cover cases like the following one. A family resides in Member State A covering all residents in its health care system. The father works as a frontier worker in Member State B. The father is subject to the legislation of Member B and the mother to the legislation of Member State A. There is no difference of views about the determination of the legislation applicable to the father and the mother. Therefore Art. 6(1) IR does not apply. However, it is possible that there is a difference of views between the two institutions about the question of who has to bear the costs for granting benefits in kind to their child (who is, like the mother, subject to the legislation of Member State A). Member State A could argue that Member State B has to grant these benefits by referring to Articles 17 and 32(1). Member State B could have another opinion by arguing that Member State A is competent for granting the benefits because the mother has a professional activity in the Member State of residence (Art. 32(2)). For such cases, Art. 6(2) IR stipulates that the Member State of residence, if it is one of the Member States involved, has to provide the benefits on a provisional basis. If the Member State of residence is not involved in the difference of views, then it is the Member State in which the request was first submitted. As said before, Art. 60(3) IR contains a specific rule on provisional compe- 9 tences for granting family benefits. However, in case of differing views about such provisional competence, Art. 60 IR does not have its own conciliation procedure, but refers, in its para. 4, to Art. 6(2) IR. This results at the end of the day in a more frequent application of Art 6(2) IR, since differing views about provisional competences are likely in particular in the field of family benefits. Art. 6(2) IR does not apply if the difference of views concerns the determina- 10 tion of the residence itself. If, for instance, Member State A and Member State B disagree with each other about which institution should provide a special noncontributory benefit, due to uncertainty about the residence of the person concerned, Art. 6(2) IR will not be of any help, since the solution provided by this provision, namely the institution of the place of residence, is precisely the subject of the dispute. In such cases the institutions have to determine the residence of the person concerned in accordance with the procedure foreseen by Art. 11 IR. Rob Cornelissen

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3. Provisional calculation of benefits and contributions

Art. 7 IR deals with cases where there is no difference of views about which legislation is applicable or about which institution has to provide benefits, but where not all elements for the final calculation of benefits to be granted or contributions to be paid are given. This provision only applies, if the missing elements for the calculation have to come from another Member State. If the missing elements have to come from within the Member State concerned, art. 7 IR is not applicable. 12 In such cross-border cases the competent institution has to calculate, on request of the person concerned, the amount of the benefit or contribution on a provisional basis (even if a provisional calculation of benefits or contributions is not foreseen by the national legislation of the Member State concerned). This is obviously subject to the condition that such a calculation is possible on the basis of the information at the disposal of that institution. Let us take the following example to illustrate this. In several Member States the amount of a benefit to be granted depends on the question to what extent the applicant disposes of other income. If the applicant has income coming from another Member State, the competent institution can obtain the information about this income by making a request for administrative assistance to an institution of the other Member State in accordance with Art. 76(2). While this official procedure is pending, the competent institution will provisionally calculate the benefit on the basis of the evidence produced by the person concerned. By virtue of the first words of Art. 7 IR special rules provided for by the IR have priority above Art. 7 IR. Art. 50 IR (concerning the provisional calculation of pensions) is an example of such a special rule. 13 As soon as the competent institution disposes of all the necessary supporting evidence, the benefit or the contribution has to be recalculated (Art. 7(2) IR). If the recalculation results in a claim against the person concerned (the provisional benefit was too high or the provisional contribution too low), this claim may be recovered in the other Member State in accordance with Art. 71 et seq. IR. Art. 73 IR, however, cannot be applied, since this provision is restricted to cases covered by Art. 6 IR. 11

4. Conciliation procedure 14

If in the cases covered by Art. 6(1)and(2) IR no agreement can be reached between the institutions involved, the conciliation procedure referred to in Art. 6(3) IR becomes applicable. The matter may be brought before the Administrative Commission for conciliation (but not for decision). This provision is one of several which give the Administrative Commission the role of conciliator (e.g. Art. 76(6) in general terms - Art. 5(4) IR with regards to the legal value of documents and supporting evidence, Art. 16 IR in respect of the applicable legislation in cases covered by Art. 13, and Art. 60(4) IR concerning family benefits

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which refers back to the conciliation mechanism of Art. 6 IR). Despite its broad title, Decision A1 of the Administrative Commission of 12 June 2009 on the establishment of a dialogue and conciliation procedure concerning the validity of documents, the determination of the applicable legislation and the provision of benefits (O.J. L 106 of 24 April 2010) only deals with cases of differing views about the validity of documents or about the applicable legislation. This procedure cannot be used in cases of differing views about which institution has to provide benefits. In view of this role as conciliator, the Administrative Commission has set up a Conciliation Board (see commentary on Art. 71-72). 5. Retroactive settlement following the final decision

Where at the end of the day it is established that the final competence di- 15 verges from the provisional one, the case has to be settled retroactively. The institution identified as being competent is deemed retroactively to have been so, as if the difference of views had not existed. Art. 6(4) in fine IR clarifies that the retroactivity goes back at least to either the date of provisional membership or the first provisional granting of benefits. By this clarification Art. 6(4) IR creates European procedural law superseding national procedural law (e.g. periods of limitation). Let us take the example of two Member States having differing views about the question whether or not Art. 12 (posting) is applicable to a person working in Member State A. In accordance with Art. 6(1)(a) IR Member State A is provisionally competent. If finally it is established that Member State B (where the sending employer has its seat) was competent, the legislation of Member State B has to be applied retroactively from the start of the posting, even if the law of this Member State foresees shorter periods of limitation. Likewise, Member State A has to terminate its coverage retroactively at least from the start of the posting, regardless of the length of its national periods of limitation. By virtue of Art. 6(5) IR the financial situation of the person concerned must 16 also be settled retroactively as regards provisionally paid contributions and cash benefits in order to avoid double payment of contributions or benefits for one and the same period. This has to be done either by way of offsetting (Art. 72-74 IR) or in accordance with the recovery procedures laid down in Art. 75-85 IR. Such an offsetting or recovery is possible even if the retroactivity within the meaning of Art. 6(4) IR goes beyond the national periods of limitation referred to in Art. 72-85 IR, because Art. 6(4) IR has to be seen as the ‘lex specialis’ which has priority above e.g. Art. 78(2)(c)IR. Art. 6(5) IR also contains a provision about the settlement of benefits in kind 17 which have been provisionally granted. Such benefits have to be reimbursed to the institution having provisionally granted them by the competent institution in accordance with Art. 62 et seq. IR. This reimbursement obligation applies even if the person would not have been entitled to the benefit in question according to the legislation of the Member State which has finally been identified as being Rob Cornelissen

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competent. Let us take the same example as indicated above of two Member States having differing views about the applicability of Art. 12 (posting) to a person working in Member State A. In accordance with Art. 6(1)(a) IR Member State A is provisionally competent. If the worker has received benefits in kind in Member State A and later it appears that Member State B is competent, then all the benefits in kind granted by Member State A have to be reimbursed by Member State B. This is true even if the benefits in question were not benefits which had “become necessary on medical grounds” within the meaning of Art. 19. If from the start Member State B had been identified as the competent Member State, it would have required that the worker concerned should seek authorization for the benefits in question in line with Art. 20. However, Member State B cannot refuse the reimbursement of the benefits because the conditions for granting the authorization were not fulfilled. Article 90 Reg. No. 987/2009 Currency conversion For the purposes of applying the basic Regulation and the implementing Regulation, the exchange rate between two currencies shall be the reference rate published by the European Central Bank. The date to be taken into account for determining the exchange rate shall be fixed by the Administrative Commission.

This provision is only of relevance in relation to Member States which have kept their own national currencies. Under Art. 107 of the old Reg. No. 574/72 the conversion rates, once determined on a specific day and published in the Official Journal, were fixed for the whole quarter. Under Art. 90 IR such rigid fixed rates no longer apply. Art. 90 IR simply charges the Administrative Commission with the task to decide about further details, in particular the date to be taken into consideration for determining the exchange rates. The Administrative Commission has discharged its duty by adopting Decision H3 of 15 October 2009 (O.J. C 106 of 24 February 2010). Contrary to the past, fixed exchange rates no longer exist. By virtue of Art. 2 of Decision H3 the rate of conversion is the daily rate published by the European Central Bank on the day when the relevant operation is performed by the institution. No further details are given. This could give rise to questions. Let us take the example of the calculation of a contribution due by a person on the basis of income received in a currency other than that of the competent institution. When will in this case the corresponding operation be performed within the meaning of Art. 2 of Decision H3? Probably it is the day on which the staff member of the competent institution carries out the concrete conversion. This might be a very practical arrangement, but it does not necessarily facilitate the verification of the calculation, in particular in times of volatile exchange rates. How could the exact day of conversion, if contested, be verified? It is not excluded that this provision of Decision H3 will be refined on the basis of the evaluation referred to in Art. 8 of Decision H3. Article 91 Reg. No. 987/2009 Statistics The competent authorities shall compile statistics on the application of the basic Regulation and the implementing Regulation and forward them to the secretariat of the Administrative Commission. Those data shall be collected and organised according to the plan and method defined by the Administrative Commission. The European Commission shall be responsible for disseminating the information.

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Statistical data should allow Member States and the European Commission to 18 assess the functioning of the current regulations and to underpin proposals for possible improvements. Despite the importance of good data in order to monitor Union law, reliable and comparable statistical data are scarcely collected. Some data are available on the use of Portable Documents A1 (concerning mostly posted workers and workers employed in two or more Member States), on the use of the European Health Insurance Card, on the use of Portable Document S2 (planned cross-border health care), on the claims situation concerning benefits in kind provided by one Member State on behalf of another Member State and on the times for processing pension claims. But in other fields there are no comparable statistical data at EU level at all. Art. 91 IR charges the competent authorities with the duty to compile statis- 19 tics on the application of the regulations and to forward them to the Administrative Commission. The Administrative Commission is in charge of the planning and the methodology of the data collection. It is in particular important to define a uniform structure for data collection. To this end the Administrative Commission has taken the first necessary steps. It has created an ad-hoc group on data collection. This group has worked out a list of key horizontal indicators as well as a number of indicators for each branch of social security. It has also made proposals for the methodology for the collection of these key indicators (survey data, administrative data, EESSI) as well as a roadmap for the collection of statistical data. Obviously, national administrations need to adapt their registrations and reporting to comply with the new requirements. This will take some time. Within the Administrative Commission the discussions on the list of indicators and on the roadmaps are still ongoing.

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Part 3: Association Agreements Bibliography: Cadet, Main features of the revised Brussels I Regulation, EuZW 2013, p. 218 et seq.; Cornelissen, Third-Country Nationals and the European Commission of Social Security, EJSS 2008, p. 347 et seq.; Eisele/Van der Mei/Pieter, Portability of Social Benefits and Reverse Discrimination of EU Citizens vis-à-vis Turkish Nationals: Comment on Akdas, E.L.Rev. 2012, p. 204 et seq.; Foubert, Note relating to EU:C:1995:168, CJEL 1995 p. 515 et seq.; Hatzopoulos, Turkish service recipients under the EU-Turkey Association Agreement: Demirkan, CMLRev 2014, p. 647 et seq.; Kahil-Wolff, Made in the EU, to consume in Switzerland - Europäisches Sozialrecht einmal anders, ZESAR 2014, p. 51 et seq.; Larking, AG Defends Italy's Withholding Tax On EEA Residents, Tax Notes International 2009, p. 806 et seq.; Mastrov, Clarifying the Concept of Victim in the Motor Vehicle Drivers’ Liability Insurance: The ECJ’s Judgment in case C-442/10, EJRR2012, p. 257 et seq.; Peers, Note relating to EU:C:1995:168, CMLRev 1996 p. 103 et seq.; Rennuy/Van Elsuwege/Peter, Integration without membership and the dynamic development of EU law: United Kingdom v. Council (EEA), CMLRev 2014, p. 934 et seq.; Schermers, Note relating to the decision EU:C: 1990:322, CMLRev 1991, p. 183 et seq; Druckman, Applicability of American Law to U.S. Employees Working Abroad, SZ S 2013, p. 2 et seq; Verdonck, Note relating to EU:C: 2006:325, The Columbia Journal of European Law 2007, p. 489 et seq.; Watson, EU Social and Employment Law, 2nd ed. 2014; Yalincak, Freedom of Movement Rights of Turkish Nationals in the European Union, CJEL 2013, p. 391 et seq.; Zimmer, ECJ Settles Dispute Over Italian Withholding Tax, Raising New Concerns About EEA Agreement, EBLR 2011, p. 107 et seq.

I. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. The Ankara Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Spirit and Purpose of the Ankara Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 2. Council Decision of 6 December 2012 and Draft Decision of the Association Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. The European Economic Area Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Spirit and Purpose of the EEA Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Coordination of social security within the EEA Agreement . . . . . . . . IV. The Free Movement of Persons Agreement with Switzerland . . . . . . . . . . . 1. Context, Spirit and Purpose of the FMP-Agreement. . . . . . . . . . . . . . . . . 2. Coordination of Social Security within the FMP Agreement . . . . . . . 3. Other Aspects Related to the Coordination of Social Security . . . . . .

1 2 2 4 5 5 6 7 7 9 12

I. Overview 1

Pursuant to Article 217 TFEU (ex-Art. 310 TEC), the European Union may conclude Association Agreements. The treaty-making power provided by this rule has existed since the beginning of the European Integration process and has been widely used. It is now part of the very broad action of the Union on the international scene described by Art. 205 TFEU. Some of the existing Association Agreements include rules about free movement of persons and coordination

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of social security. This is true for the European Economic Area Agreement (EEA) signed in 1992 (in force since 1 January 1994), including Iceland, Liechtenstein and Norway, as well as for the Swiss-EU Bilateral Agreement on the Free Movement of Persons of 1999 (in effect since 1 June 2002). Both refer to Reg. No. 883/2004 and Reg. No. 987/2009 in order to facilitate the free movement of persons. They also declare applicable all related instruments, such as the Decisions of the Administrative Commission for the Coordination of Social Security Systems (Art. 71 Reg. No. 883/2004), and stipulate that the relevant CJEU case law is binding. Some other international agreements contain rules similar to EU-Coordination law, such as the Association Agreement with Turkey of 1963, which refers to a number of provisions of Reg. No. 883/2004. Like all the other treaties concluded by the European Union, Association Agreements bind the EU Institutions and the Member States. They fall under the jurisdiction of the European Court of Justice which oversees the correct application of the Agreements and secondary legislation (special bodies set up by the Agreements are competent to adopt legal acts in order to make the rights and obligations more concrete). Most of the Court’s decisions concern the legal effect or the personal and material scope of the Agreements. Regarding the more technical aspects of the coordination rules, the general case law related to Reg. No. 883/2004 and Reg. No. 987/2009 is applicable; the EEA Agreement and the Agreement with Switzerland contain special clauses which refer to the jurisprudence of the European Court of Justice. All three of the aforementioned Agreements have as an objective to protect individual rights by coordinating the social security systems of the contracting parties; however, they also have specific aims and different legal structures. It is therefore necessary to discuss them individually: for historical reasons first the Ankara Agreement (see title II.), second the EEA-Agreement (see title III.) and last the Swiss-EU Bilateral Agreement on the Free Movement of Persons (see title IV.). This chapter provides only summary information: the Ankara Agreement (especially the rules concerning social security) is currently being revised; the Agreement with Switzerland might be revised or resigned in the near future; and the EEA Agreement establishes rules concerning free movement of persons which are equivalent to EU law. It should also be borne in mind that persons who live and work within the European Union but who do not possess European Citizenship, fall within the scope of EU immigration law adopted on the basis of Art. 79 TFEU (ex-art. 63 TEC) related to the Area of Freedom, Security and Justice (AFSJ). In addition, the EU has signed Agreements in order to enforce AFSJ-policy, such as the Agreement with Turkey on the readmission of persons without authorization of 16 December 2013 (OJ 2014 L 134/3). In the field of coordination of social security law, the most important act is Reg. No. 1231/2010 of the European Parliament and of the Council of 24 November 2010 extending Reg. No. 883/2004 and Reg. No. 987/2009 to nationals of third countries who are not already covered by these Regulations solely on the grounds of their nationality (OJ 2010 L 344/1). MoreBettina Kahil-Wolff

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over, family members who are not nationals of a Member State nonetheless have rights corresponding to those granted to European Citizens; the relevant rules are part of EU legislation concerning Free Movement of Persons, especially Directive No. 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Reg. No. 1612/68 and repealing Directives 64/221/EEC, et al. (see, for instance, Art. 5 Directive No. 2004/38/EC which exempts family members who are not nationals of a Member State from certain visa requirements, OJ 2004 L 158/77). In terms of social security, Reg. No. 883/2004 and Reg. No. 987/2009 also apply to family members even if they do not have European Citizenship (see commentary of Art. 2 Reg. No. 883/2004).

II. The Ankara Agreement 1. Spirit and Purpose of the Ankara Agreement

The Ankara Agreement (Agreement Establishing an Association Between the European Economic Community and Turkey) was signed on 1 September 1963, an Additional Protocol on 23 November 1970 (see Council Reg. No. 2760/72 of 19 December 1972, OJ 1973 C 113, p. 17). Its aim is to “promote the continuous and balanced strengthening of trade and economic relations between the Parties” (Art. 2 Ankara Agreement). In order to prohibit discrimination on grounds of nationality (see Art. 9 of the Ankara Agreement), the Association Council established by the Agreement has adopted several Decisions, especially Decision No. 1/80 of 19 September 1980 on the development of the Association (OJ 1981 L 65). According to well-settled case law, the principles of Free Movement of Workers enshrined in the EU Treaties “must be extended, so far as possible, to Turkish workers who enjoy the rights conferred by Decision No. 1/80” (Case C-1/97 (Birden), EU:C:1998:568, para. 23, referring to Case C-434/93 (Bozkurt), EU:C:1995:168; see also Case C-14/09 (Genc), EU:C:2010:57, para. 19, CJEU, Case C-275/02 (Ayaz), EU:C:2004:570, and CJEU, Case C-294/06 (Payir), EU:C:2008:36). This also includes the rights of family members who are nationals of third countries (Case C-451/11 (Dülger), EU:C:2012:504). According to Art. 41 of the Additional Protocol No. 2760/72, the contracting parties must refrain from introducing new restrictions on the freedom of establishment and services but this rule does not encompass the passive freedom of services; in the Demirkan Case, the Court held that Turkish nationals cannot rely on the possibility of receiving services in a Member State in order to claim freedom of persons (Case C-221/11 (Demirkan), EU:C:2013:583). 3 As a complement to the provisions concerning the free movement of workers laid down in Decision 1/80, another Decision establishes rules concerning the 2

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coordination of social security law: Decision No. 3/80 of the Association Council of 19 September 1980 on the application of the social security schemes of the Member States of the European Communities to Turkish workers and members of their families (OJ 1983 C 110/60). This act was adopted on the same day as Decision No. 1/80. Its purpose is to coordinate the Member States’ social security schemes in order to enable Turkish workers to qualify for benefits in the traditional branches of social security. Therefore, the Decision contains the typical coordination rules: for example, the prohibition of discrimination on the grounds of nationality (Art. 3), the waiving of residence clauses (Art. 6), provisions concerning applicable legislation (Art. 9), the aggregation of periods in certain fields, such as illness or maternity (Art. 10) and family benefits (Art. 18), the collaboration between authorities and institutions (Art. 20), etc. Numerous articles of Decision 3/80 directly refer to EU coordination law. The applicable legislation, for example, is determined in accordance with the rules set forth in Art. 13, 14, 15 etc. of Reg. No. 1408/71. In case of accidents at work and occupational diseases, even the entire chapter of Reg. No. 1408/71 concerning these risks (Art. 52 to 63 Reg. No. 1408/71) applies. These references, however, do not signify that the rules laid down in Decision 3/80 have exactly the same meaning or the same legal effect as the corresponding EU law. According to settled case law, the question whether a provision of an Agreement concluded by the European Union or a provision adopted by a body based on such an Agreement is directly applicable must be examined carefully; such rules “must be regarded as being directly applicable when, regard being had to its wording and the purpose and nature of the agreement itself, the provision contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measures” (Case C-277/94 (Taflan-Met), EU:C: 1996:315, para. 24 and 25, referring to Cases C-12/86 (Demirel), EU:C: 1987:400 and Case C-192/89 (Sevince), EU:C:1990:322). By taking into account the fact that Decision 3/80 does not contain precise and detailed provisions like those provided by implementing Reg. No. 574/72 (now Reg. No. 987/2009), the Court has denied the direct effect of several provisions. In the Taflan-Met-Case the Court has held that the rules concerning the aggregation of periods are intended to be supplemented and implemented by a subsequent act of the Association Council and that, as a result, they cannot be applied directly (Taflan-Met, para. 37). Subsequently, the Court clarified the direct effect question holding that some of the rules contained in Decision 3/80, especially the rules prohibiting discrimination on grounds of nationality and waiving residence clauses, have direct effect and can be relied upon before national courts (Case C-262/96 (Sürül), EU:C:1999:228 and Case C-485/07 (Akdas), EU:C: 2011:346). Art. 6 of Decision No. 3/80 precludes legislation of a Member State which withdraws the award of invalidity benefits from former Turkish migrant workers when they have returned to Turkey after losing their right to remain in the host Member State because they became incapacitated in that Member State Bettina Kahil-Wolff

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(CJEU, Case C-485/07 (Akdas, Agartan) et al., EU:C:2011:346). The reference to EU-law does not yet include the new Reg. No. 883/2004 and Reg. No. 987/2009. Therefore, as mentioned above, the Decision is in the process of being revised. Other acts, especially Council Decision 2008/157/EC of 18 February 2008 on the principles, priorities and conditions contained in the Accession Partnership with the Republic of Turkey and repealing Decision 2006/35/EC (OJ 2008 L 51/4), are intended to prepare for the future membership of Turkey. 2. Council Decision of 6 December 2012 and Draft Decision of the Association Council 4

Art. 39 of the Additional Protocol of 1970 provides that the Association Council shall adopt social security measures for workers of Turkish nationality moving within the European Union. This goal has not yet been achieved because since Decision No. 3/80, no Regulation designed to implement that decision has been adopted; a Proposal for a Council Regulation of 1983 has never been approved (Proposal for a Council Regulation implementing within the European Economic Community Decision No. 3/80 of the EEC-Turkey Association Council on the application of the social security schemes of the Member States of the European Communities to Turkish workers and members of their families, OJ 1983 C 110/1). Moreover, Decision No. 3/80 still refers to the former Reg. No. 1408/71 and Reg. No. 574/72, which were replaced by Reg. No. 883/2004 and Reg. No. 987/2009 in 2010. In order to update the provisions concerning social security coordination, the EU Council has adopted the position to be taken on behalf of the European Union within the Association Council (Art. 1 Council Decision 2012/776/EU of 6 December 2012, OJ 2012 L 340/19). The proposal of a new Decision to be taken by the EU-Turkey Association Council is designed to implement the relevant provisions of the Ankara Agreement in relation to the coordination of social security systems. It also regulates the relationship between the Council Decision and Reg. No. 1231/2010 (see Recital No. 8 and 11 of the Draft Decision). The Draft decision contains rules on how to define several terms (such as “worker”, “member of the family”, “legislation”, etc., Art. 1) and the personal scope (Art. 2). It grants equality of treatment (Art. 3) to “Turkish workers who are legally employed in a Member State and any member of their family legally residing with them (…)”. The Draft Decision, containing only 14 articles, is much shorter than Decision No. 3/80 because it mostly lays down special provisions which correspond to the specific characteristics of Turkish legislation (Recitals 12 and 13). The extension of Reg. No. 883/2004 and Reg. No. 987/2009, brought by Reg. No. 1231/2010, answers almost all the other questions. The Draft has not yet been adopted by the Association Council because the Court had to control and declared valid the choice of the legal basis of the Council decision 2012/776/EU (Case C-81/13 (United Kingdom/Council of the EU), EU:C:2014:2449, para. 65).

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III. The European Economic Area Agreement

III. The European Economic Area Agreement 1. Spirit and Purpose of the EEA Agreement

The Agreement on the European Economic Area (EEA Agreement, OJ 1994 5 L 1/3) of 1992, effective as of 1 January 1994, contains rules that are very similar to the legal system based on the Treaty of the Functioning of the European Union. According to Art. 7 EEA Agreement the entire acquis communautaire and the Decisions of the EEA Joint Committee are binding on the contracting parties (the EU and EU Member States, on one hand, Iceland, Liechtenstein and Norway, on the other hand; see also Art. 99 concerning the Decision-making procedure applicable to new EU legislation). The acquis communautaire includes all the rules concerning free movement of persons, services and capital, competition, social policy, consumer protection, company law, etc. Every provision of the EEA Agreement, to the extent that it is identical to a corresponding rule of EU law, must be interpreted in conformity with the relevant rulings of the Court of Justice handed down prior to the date of signature of the Agreement (Art. 6 EEA Agreement). It is for the Court of Justice to ensure that identical rules are interpreted uniformly within the Member States thereby allowing, to the fullest possible extent the realization of the free movement of goods, persons, services and capital within the European Economic Area (Case C-48/11 (A Oy), EU:C:2012:485, para. 15, referring to Cases C-540/07 (Commission v. Italy), EU:C:2009:717 and C-72/09 (Rimbaud), EU:C:2010:645). In order to promote uniform interpretation, the EEA Agreement has created a system of exchange of information between the Court of Justice and the EFTA Court. The role of the EFTA Court was defined after the Court of Justice held, in Opinion 1/91 of 14 December 1991 (ECR 1991 I-06079) that the rules concerning the settlement of disputes should not affect the case law of the Court of Justice (see also Opinion of the Court 1/92 ECR I-2821 1992). The case law of the EFTA Court is available at: http://www.eftacourt.int/. 2. Coordination of social security within the EEA Agreement

With respect to social security, Art. 29 EEA Agreement contains the same 6 principles as Art. 48 TFEU (ex-Article 42 TEC): it provides for the aggregation of periods and the exportation of benefits. According to Decision No. 76/2011 of the EEA Joint Committee of 1 July 2011 amending Annex VI (Social Security) and Protocol 37 to the EEA Agreement (OJ 2011 L 262/33) the rules established by Reg. No. 883/2004 and Reg. No. 987/2009 apply, mutatis mutandis, to Iceland, Liechtenstein and Norway. An action for annulment of the Council Decision 2011/407/EU of June 2011 concerning the position to be taken by the European Union within the EEA Joint Committee concerning an amendment to Annex VI (Social Security) was dismissed by the Court in 2013 (Case C-431/11

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(United Kingdom/Council), EU:C:2013:589). The Regulations are part of the internal legal order of the Contracting Parties and prevail in cases of possible conflict with other statutory provisions (Case E-6/12 EFTA (Surveillance Authority v. Kingdom of Norway), 11 September 2013). They are binding and directly applicable (Case E-6/12 EFTA, para. 67). The EFTA Court frequently refers to CJEU case law, recalling for instance that residence clauses could deter EEA workers from exercising their right to freedom of movement and would therefore constitute an obstacle to that freedom (para. 78, referring to Cases C-228/88 (Bronzino), EU:C:1990:85, and C-255/99 (Humer), EU:C:2002:73 and others). The EFTA Court therefore declared that Liechtenstein had failed to comply with the EEA Agreement by applying a requirement of residence for entitlement to benefits called “helplessness allowance” (Case E-5/06 (ESA v. Principality of Liechtenstein), 14 December 2007). The Court has also held that the cooperation between social security institutions is a specific application of the principle of cooperation laid down in Art. 3 EEA Agreement and therefore imposes a duty on the relevant institutions to guarantee the correctness of information exchanged (Case E-3/04 (Athanasios), para. 30, 14 December 2004 referring to Cases C-202/07 (Fitzwilliam), EU:C:2009:214 and C-178/97 (Banks), EU:C: 2000:169). In a manner similar to that found in the CJEU jurisprudence, the EFTA Court also uses the principle of proportionality when examining whether EFTA Member States’ social security systems have been organized in compliance with EU coordination law (Case E-3/12 (Jonsson) 20 March 2013, para. 75; see CJEU, Case C-228/07 (Petersen), EU:C:2008:494; CJEU, Case C-173/09 (Elchinov), EU:C:2010:581; CJEU, Case C-503/09 (Stewart), EU:C:2011:500). In a case concerning the duty of Norway to reimburse expenses for medical treatment in another EEA State, the EFTA Court referred to the CJEU jurisprudence concerning freedom of services; according to the EFTA Court, Art. 36 EEA precludes the application of any national rules which have the effect of making the provision of services between EEA States more difficult than the provision of services purely within an EEA State (joined Cases E-11/07 and E-1/08 (Rindal and Slinning), para. 44, 19 December 2008, referring to Cases C-157/99 (Smits and Peerbooms), EU:C:2001:404 and C-372/04 (Watts), EU:C: 2006:325).

IV. The Free Movement of Persons Agreement with Switzerland 1. Context, Spirit and Purpose of the FMP-Agreement 7

Switzerland did not ratify the EEA Agreement as a result of a negative popular vote on 6 December 1992. In May 1992, the Swiss Federal Government had submitted a membership application to the European Union, but this submission was put on hold. Instead, the relationship between the European Union and 542

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IV. The Free Movement of Persons Agreement with Switzerland

Switzerland is based on several international agreements concerning Free Trade (1972, OJ English special edition Series I Volume 1972 L 300/189), direct insurance other than life insurance (1989 OJ 1991 L 205/3), Free Movement of Persons, road and air traffic, agriculture, Technical trade barriers, Public procurement, science (1999 - Bilateral I) and Schengen, cooperation in fraud pursuits and other items (2003 - Bilateral II). The most important agreement in terms of social security is that concerning Free Movement of Persons because it refers to Reg. No. 883/2004 and Reg. No. 987/2009 (see Art. 8 FMP Agreement -Agreement on the Free Movement of Persons between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, OJ 2002 L 114/6). The FMP Agreement is part of the seven Bilateral I agreements of 1999, which entered into force on 1 June 2002 (Decision of the Council, and of the Commission as regards the Agreement on Scientific and Technological Cooperation, of 4 April 2002 on the conclusion of seven Agreements with the Swiss Confederation 2002/309/EC, Euratom, OJ 2002 L 114/1). These seven agreements are intimately linked to one another by the requirement that they come into force at the same time and that they cease to apply at the same time (see Recital No. 2 Decision 2002/309/EC, Euratom). The main reason for this link (also called “guillotine clause”) is that Switzerland was mostly interested in concluding the other Agreements (concerning agricultural products, conformity assessment, scientific and technological cooperation etc.); the EUCommission then added a proposal to also conclude an agreement concerning Free Movement of Persons. In February 2015, the Swiss Government approved the draft of new legislation on immigration introducing quantitative limits for all foreign nationals and providing priority to Swiss residents on the job market. This draft contradicts the objective of the FMP Agreement but it contains waivers in favor of EU-citizens (a request to negotiate the FMP Agreement, received on 7 July 2014, was rejected by the EU). The Free Movement of Persons Agreement (FMP Agreement) was intended 8 to bring about, among the contracting parties, the free movement of persons “on the basis of the rules applying to the European (Union)” (see the Preamble of the FMP Agreement). It accords a right of entry, residence, access to work as employed persons, establishment on a self-employed basis and the right to stay (Art. 1 lit. a) FMP Agreement). The right to establishment is granted to natural persons only; legal persons do not have this right (Case C-351/08 (Grimme), EU:C:2009:697, para. 39; see also Case C-541/08 (Fokus Invest), EU:C: 2010:74). Persons without an economic activity also have a right of entry and residence (Art. 1 lit. c) FMP Agreement) but they must prove that they possess sufficient financial means and an all-risk sickness insurance cover (Art. 24 Annex I of FMP-Agreement). The Agreement accords the same living, employment and working conditions to nationals of the Member States and Swiss citizens (Art. 1 lit. c) and Art. 2 FMP Agreement, Art. 9 § 2 Annex I FMP Agreement). Almost every EU rule concerning the Free Movement of Persons has its equivaBettina Kahil-Wolff

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lent within the FMP Agreement and must be interpreted according to EU law principles (Art. 16 § 1 FMP-Agreement). Moreover, the relevant case law of the Court of Justice must be taken into account (Art. 16 § 2 FMP Agreement); this obligation only concerns the case law prior to the date of signature, 21 June 1999, however, the Swiss Federal Court also observes the case law established after this date (Federal Digest of case law No. 136 II 5). The Joint Committee has not yet issued any decision concerning this later case law. According to the Court of Justice, the interpretation given to the provisions of European Union law concerning the internal market cannot be automatically applied by analogy to the interpretation of the Agreement; as a justification, the Court observes that Switzerland did not join the internal market of the European Union (Case C-351/08 (Grimme), EU:C:2009:697 and Case C-541/08 (Fokus Invest), EU:C: 2010:74). In Switzerland, judicial oversight is authorized by Federal and Cantonal laws. In the field of social security, those laws provide access to independent courts, according to a two-step procedure, which includes a decision by a court of first instance and the possibility of appeal to the Swiss Federal Court as a second (and last) instance. Hence, the procedure is compatible with Art. 11 of the FMP Agreement. 2. Coordination of Social Security within the FMP Agreement 9

According to Art. 8 and Annex II of the FMP Agreement, Switzerland applies Reg. No. 883/2004 and Reg. No. 987/2004 (Decision No. 1/2012 of the Joint Committee of 31 March 2012, OJ 2012 L 103/51). Art. 8 FMP Agreement has the same aim as Art. 48 TFEU; the rule insures the free movement of persons and prevents persons who have exercised the right to freedom of movement from losing social security advantages (Case C-257/10 (Bergström), EU:C: 2011:839, para. 42 and 43). All bilateral social security agreements between Switzerland and the Member States are suspended (Art. 20 FMP Agreement), unless they are more favourable to the beneficiaries (Art. 8 Reg. No. 883/2004, Federal Digest of case law No. 133 V 329 referring to Cases C-227/89 (Rönfeldt), EU:C:1991:52 and C-475/93 (Thévenon), EU:C:1995:371). The Joint Committee established under the Agreement has the power to amend Annex II (Art. 18 FMP Agreement; the European Union is represented by a representative of the EU Commission, Art. 2 Decision No. 2002/309/EC, Euratom), but the Agreement has not yet been updated to include the most recent modifications of Reg. No. 883/2004 and Reg. No. 987/2009 (the latest revisions were made in 2014: Decision No. 1/2014 of the Joint Committee of 28 November 2014, OJ 2014 L 367/122, designed to bring Annex II of the FMP Agreement up to date with respect to Reg. No. 465/2012, OJ 2012 L 149/4, and other acts). Other relevant legal acts such as Council Directive No. 98/49/EC of June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community (OJ 1998 L 209/46) are also binding (Annex II section A. No. 3 FMP Agreement); the more recent Directive 544

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IV. The Free Movement of Persons Agreement with Switzerland

2014/50 of the European Parliament and the Council of April 2014 on minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights (OJ 2014 L 128/1) is not part of the FMP Agreement. The coordination of social security systems between Switzerland and the other EFTA Member States (Iceland, Liechtenstein and Norway) is governed by the Revised EFTA Agreement (Vaduz Convention of 21 June 2001); the rules are equivalent to those of Annex II FMP Agreement but, according to the Swiss Federal Court, the personal scope is limited to nationals of the EFTA Member States (Federal Digest of case law No. 136 V 244, c. 6: a German national cannot claim aggregation of periods during which she/he worked in Liechtenstein). Art. 1 Annex II FMP Agreement is very clear about the rules applicable to so- 10 cial security. It specifies that the contracting parties agree to apply the legal acts listed in the Annex (Reg. No. 883/2004 and other acts) and that the term ”Member State” contained in those acts “shall be understood to include Switzerland”. Therefore, the Swiss Confederation has published the relevant acts in its official compendiums. A consolidated version is available at http://www.admin.ch/opc/f r/classified-compilation/20112875/index.html: RS (Recueil systématique) No. 0.831.109.268.1 (containing Reg. No. 883/2004) and No. 0.831.109.268.11 (containing Reg. No. 987/2009). The Regulations are part of Swiss Federal Law; they are legally binding and directly applicable (Federal Digest of case law No. 130 V 253). The Swiss jurisprudence largely refers to the case law of the European Court of Justice for the interpretation of EU legal terms such as “worker” (Federal Digest of case law No. 138 V 392) and “sickness benefits” (Federal Digest of case law No. 138 V 533). The Court has also followed CJEU case law concerning social benefits for family members (Federal Digest of case law No. 133 V 320 and No. 139 V 393), the principles of equivalence and effectiveness within administrative procedures (Federal Digest of case law No. 128 V 315 referring to the joined Cases C-52/99 and C-53/99 (Camarotto and Vignone), EU:C:2001:112) and the Petroni-principle (Judgment of 11 May 2010, 8C_468/2009, not published in the Federal Digest of case law but available at http://www.bger.ch/fr/index/juridiction/jurisdiction-inherit-template/jurisdictionrecht/jurisdiction-recht-urteile2000.htm). In several cases, however, the Swiss Federal Court discerned lacunae within the EU-coordination system; in such situations, the Court mostly refers to Swiss law instead of developing unwritten rules (see Federal Digest of case law No. 137 V 282: currency in which a pension is to be paid; Federal Digest of case law No. 135 V 339: information concerning the institution competent to provide health care). There are also some judgments which do not encourage the free movement of persons (see, for instance, Federal Digest of case law No. 134 V 428: no accident insurance coverage for an Austrian worker hired by a Swiss employer detached to Sweden; Federal Digest of case law No. 138 V 197: submission of a retired French person to the Swiss federal pension insurance; Federal Digest of case law No. 140 V 98: Bettina Kahil-Wolff

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refusal to take into account contributions paid in a Member State). All administrative instructions concerning the application of social security law also include references to the EU-Regulations and to the CJEU-jurisprudence (see, especially DAA - Directives sur l’assujettissement aux assurances AVS et AI, http://www.b sv.admin.ch/vollzug/documents/view/1635/lang:fre/category:22). Globally, the legal situation under the FMP Agreement corresponds to coordination law applicable within the European Union. The following section summarizes solely the points that are substantially different from EU-coordination law. It does not report on the special provisions concerning Switzerland listed in Annex II FMP Agreement; these provisions mainly refer to Annex I, II, IV, VIII, X and XI of Reg. No. 883/2004 (see, for instance, Annex VIII Reg. No. 883/2004 concerning the cases in which the pro-rata calculation is to be waived: a waiver is applicable to the Swiss pension system); they can be consulted at the website mentioned above http://www.admin.ch/opc/fr/classified-compilation/20112875/index.html: RS (Recueil systématique) No. 0.831.109.268.1 (Reg. No. 883/2004). 11 The personal scope of the coordination law differs because Reg. No. 1231/2010 of the European Parliament and of the Council of 24 November 2010 (OJ 2010 L 344/1) is not part of the FMP Agreement. Therefore, the extension of Reg. No. 883/2004 and Reg. No. 987/2009 to nationals of third countries does not apply to Switzerland. Some of the social security conventions ratified by Switzerland, however, include persons who are nationals from third countries; the Convention between Switzerland and Germany (RS 0.831.109.136.1), for instance, or the Convention between Switzerland and the Czech Republic (0.831.109.743.1) declares certain provisions applicable to those persons. It should also be noted that the FMP Agreement has no rule corresponding to European citizenship and that the CJEU case law related to this concept is not relevant. Other significant differences concern the field of health care coverage. The FMP Agreement does not contain any rule equivalent to Art. 56 TFEU (exArticle 49 TEC); persons providing services have the right to provide a service for a period not exceeding 90 days of actual work in a calendar year (Art. 5 FMP Agreement) but the Agreement does not prohibit restrictions on freedom of services in general. Nor does it refer to Directive No. 2011/24 (Directive No. 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border healthcare, OJ 2011 L 88/45). Based on this analysis, the Swiss Federal Court concludes that the EU principles concerning patients’ rights in cross-border health care (Case C-158/96 (Kohll), EU:C:1998:171) are not relevant (Federal Digest of case law No. 137 V 282). Therefore access to health care outside Switzerland is submitted to Reg. No. 883/2004 and Reg. No. 987/2009 (see especially the commentary to Art. 19 Reg. No. 883/2004). Another main difference between the FMP Agreement and EU coordination law concerns the legislation applicable to sickness insurance coverage. Annex II FMP Agreement allows persons who are covered by Swiss social security law according to Reg. No. 883/2004 (for instance because of an em-

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ployed or self-employed activity exercised in Switzerland) to be exempted from the Swiss compulsory sickness insurance if they are residents in Germany, France, Italy, Finland or Portugal and prove that they are eligible for coverage in the event of sickness in their country of residence (Annex II Section A 1 i. 3. b); the cost of benefits in kind for non-occupational accidents are shared equally between the Swiss accident insurer and the competent sickness insurance if an entitlement exists to benefits in kind from both bodies (Annex II Section A 1 i. 4.). Furthermore, according to the Protocol to Annex II to the Agreement, transitional provisions concerning minimum periods required under Swiss Federal Unemployment Insurance apply to workers from Bulgaria and Romania; during the transitional period, which ends on 31 May 2016, only workers who have paid contributions in Switzerland are entitled to benefits; a portion of the contributions levied are refunded to Bulgaria and Romania (chapter I Protocol to Annex II). Another derogation provided by the Protocol to Annex II concerns the waiving of residence rules (see commentary to Art. 7 Reg. No. 883/2004): allowances for helpless persons granted under the Swiss Federal invalidity insurance and under the Swiss Federal old-age and survivors pensions are paid exclusively if the person concerned in a resident of Switzerland. This exception is in addition to those provided by Annex II (Annex II Section A 1 h), which refers to Art. 70 Reg. No. 883/2004 concerning the category of “Special non-contributory cash benefits; for Switzerland, mainly three types of benefits are designated in Annex X of Reg. No. 883/2004 and are therefore not exportable: supplementary benefits provided by the Federal Supplementary Benefits Act of 19 March 1965 and similar benefits provided for under cantonal legislation; non-contributory mixed benefits in the event of unemployment, as provided under cantonal legislation; non-contributory extraordinary invalidity pensions for disabled persons granted by the Federal Invalidity Insurance of 19 June 1959. It also must be borne in mind that benefits that do not fall within the scope of Reg. No. 883/2004 and Reg. No. 987/2009 may be claimed on the ground of equality of treatment. Art. 9 Annex I FMP Agreement grants equal treatment in terms of tax concessions and welfare benefits in a similar way to Reg. No. 492/2011 of the European Parliament and the Council of 5 April 2011 on the freedom of movement for workers within the Union (OJ 2011 L 141/1). According to the Swiss Federal Court, benefits due to victims of crime must be qualified as welfare benefits (Federal Digest of case law No. 137 II 242); the same jurisprudence applies to school education for disabled children (Federal Digest of case law No. 132 V 184) and a rule which exempts persons from contribution periods in the field of unemployment coverage (Federal Digest of case law No. 133 V 367). 3. Other Aspects Related to the Coordination of Social Security

The Swiss legal system contains a certain number of rules that are very simi- 12 lar to EU law, especially in the fields of labor law, insurance, automobile liability and corporate governance. Most of these rules were adopted in order to align Bettina Kahil-Wolff

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Swiss law with EU legislation (a process called “voluntary or autonomous implementation”). According to the Swiss Federal Court, Swiss legal rules implementing EU law should be interpreted with a view towards the spirit of EU law (see for instance Digest of case law No. 129 III 335, Digest of case law No. 132 III 32 and Digest of case law 136 III 552). Some of those rules are relevant for the coordination of social security. A Federal law from 4 October 2002 modified the legislation concerning motor vehicle liability in order to adapt it to the relevant EU legislation, especially to Directive 2000/26/EC of the European Parliament and of the Council of 16 May 2000 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and amending Council Directives No. 73/239/EEC and No. 88/357/EEC (Fourth motor insurance Directive, OJ 2000 L 181/65). Nota bene: The rules of this Directive have been incorporated into Directive No. 2009/103/EC of the European Parliament and of the Council of September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability (codified version OJ 2009 L 263/11). These rules are also relevant for social security institutions if they claim compensation instead of the injured person (in case of recourse against the person liable). They get the same information as the injured person (Art. 79 a Swiss federal law concerning road traffic, RS 741.01) and they have a direct right of action against the insurance undertaking covering the person responsible (Art. 18 Directive No. 2009/103/EC). Furthermore, a Swiss Federal law related to posted workers is inspired by Directive No. 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers within the framework of the provision of services (OJ 1997 L 18/1); according to this legislation, the foreign employer must prove, in certain cases, that social contributions have been paid in the home country (see the Swiss Federal law concerning posted workers and Art. 8 of the corresponding ordinance (Official compendium RS 823.201). The Revised Lugano Convention (RS 0.275.12) is aligned with the Brussels I Reg. No. 44/2001 (see, now, Reg. No. 1215/2012 of the European Parliament and the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ 2012 L 351/1). These instruments are not, of course, applicable to social security (Art. 1 § 2 c Reg. No. 1215/2012 and Art. 1 § 2 c Lugano Convention) but should be borne in mind whenever labor or other disputes (for example actions against a person liable for death or disability) are engaged.

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Index access point 78 3 accident insurance monopoly pre 36 pp 9 accident while travelling 36 8 active labour market policies pre 61 pp 2 activity only in other Member States special IR 5 – portable document A1 special IR 6 administrative assistance 76 7 Administrative Commission 1 18, 72 1 – Audit Board 74 3 – conciliatory role 72 15 – decisions 72 9, 12 – tasks 72 26 – Technical Commission 73 3 – transmission of data 72 21 advances of maintenance payments 3 27 Advisory Committee 75 1 – tasks 75 4 age limits 4 16, 48 2, 3, 11 aggregation – principle of 38 9 aggregation of periods 51 1, pre 61 pp 5, 61 1, 12, 66 2 – special provisions 51 2 aggregation provision TFEU 48 8 Ankara Agreement AA 2 Annex XI 83 2, 3 anti-discrimination law 4 14 applicable legislation special IR 2, 87a 26 applicant party 1 28 Art. 71 IR – priority rule 84 3 assimilation of facts 5 1 ff, pre 50 pp 5 – evaluative classification 5 6 – functional equivalence 5 6 – harmonisation 5 1 – system of conflict-of-law rules 5 1 Association agreement AA 1 – Turkey 48 10 Association Council AA 3, 72 35 asylum 1 12 atypical frontier worker 65 1, 10, 10a Audit Board – annual report 74 5 authorisation 36 16, 17, 37 1, 64 4 – refusal of 36 19, 22 authority 1 17 availability 64 5, 6, 65a 2

availability for work 3 23 benefits in kind 1 23, pre 36 pp 5, 36 5, 6, 17 – calculation special IR 11 – ceiling 62 4 – competence for granting special IR 8 – costs of travel 19 16 – substantial 19 17 benefits not awarded 87a 11 bilateral agreements 2 13 binding effect – certificates 17 23 et seq. – medical findings 17 24 et seq., 20 28 birth documents 48 8, 9 care allowance 17 6, 36 4 care benefits 3 9, 82 9 care insurance 3 9 Case Rönfeldt 87a 4 cash benefits 36 10, 15 child raising allowance 3 28 children 1 13 civil servants 1 7, 3 44, 45, 46, 48, 36 6 – pensions 60 1 – special provisions in health insurance legislation 35 3 claims – restrictions of 50 11 – submission of 50 6, 8 collective agreements 1 15, 3 4, 5, 9 3 comitology 72 5 competent body 81 5 competent institution 1 19 competent Member State 1 21 competition between rights 36 20 conciliation procedure special IR 14 conflict-of-law rule 70 5 contractual agreements 3 4, 5 contractual provisions 1 15 contribution burden – repartition between employer and employee 84 18 contributions special IR 7 – ceiling 62 4 Convention 102 3 1, pre 44 pp 4 convergence strategy pre 50 pp 6 corresponding authority 81 2 cost bearer 36 5

549

Index cost bearing 65 17 costs of burial 37 1 costs of recovery 84 47 costs of transport 37 1 country of employment principle 67 9 cross-border situation 2 9 cumulation – prohibition of 39 5 damages to persons 3 40 data transmission 78 1 date of submission 81 6 death grant 1 23, 3 20, 42 1 deficits in the provision of benefits in kind on behalf of another Member State pre 17 pp 32 definition of member of the family in the case of benefits in kind from the health insurance 17 10 Denmark – unemployment benefits 82 12 derived rights 2 15 derogation of reimbursement 85 8 deterioration by Reg. No. 883/2004 87a 3 differentiation of sickness and long-term incapacity for work pre 17 pp 29 Directive on data protection – objective 77 4 disabled persons 3 13, 70 13 – protection of 70 7 disguised discrimination 4 8 domicile 1 14 EEA Agreement AA 5 EESSI 72 11, 22, 73 4, 78 4, 79 2 – responsibility 78 11 – transitional period 78 19 EFTA Agreement AA 9 EFTA Court AA 5 EHIC 72 28 electronic directory 78 7, 22 electronic document – validity 78 16 Electronic Exchange of Social Security Information 72 11, 78 9 employed person 62 1, 2 employer liability pre 17 pp 22 employment 1 3 employment principle pre 67 pp 1 employment services 65 7, 11

550

entitlement – loss of 64 10 – retention of 64 10 equality of treatment 6 12, 10 2, 4 equal treatment rule pre 36 pp 4, 7 equivalence 38 3, 40 6, 7 EU citizens 2 4, 7 EU legislation 91 1 exclusive responsibility 38 3 exemption from authentication 80 3 exemption from fees 80 2 export of benefits 7 1 ff, 63 1, 64 3, 70 2 – cash benefits 7 1 – exceptions 7 5 – exclusion from 70 18 – family benefits 7 10 – freedom of movement of workers 7 1 – long-term care benefits 7 8 – rehabilitation benefits 7 8 – residence clauses 7 1 – restriction of 64 1 – sickness benefits 7 8 – special non-contributory cash benefits 75 – territorial conditions 7 4 – to third countries 7 11 – unemployment benefits 7 9 – union citizenship 7 1 exposure pre 36 pp 6 family allowances – differential supplement 68 8 family benefits 1 23, 3 27, pre 67 pp 1 ff – advance payments of maintenance 67 8 – benefits for orphans 69 1 – changes in competence 68 10 – changes in legislation 68 10 – child allowances for pensioners 69 1 – competent Member State 67 1 – definition 67 5 – family allowances 67 6 – member of the family 67 3 – rules of priority 68 1, 5 – submission of an application 68 9 – uniform coordination pre 67 pp 4 family members 1 13, 2 5, 14, 36 12, 61 5, 62 5 favourability principle 50 11 financial equilibrium pre 36 pp 12 freedom of movement 3 1, 2, 7, 33, pre 50 pp 3; TFEU 45 35 freedom of movement of workers pre 61 pp 3

Index freedom to provide services 2 10, pre 17 pp 10, 36 17, 20 – healthcare benefits pre 17 pp 10 – passive freedom to provide services pre 17 pp 10 free movement of persons 4 9 free movement of workers 2 7 frontier workers 1 10, 61 12, 62 1, 4, 64 7, 65 1, 7, 13, 72 18 – atypical 65 10, 87a 23 genesis 72 2 government representative 72 6 habitation 1 14 health care treatment 36 17 health damages – compensation of 3 40 health insurance card, European 19 20 et seq. home basis 1 28, 87a 27 hybrid benefits 70 1 incapacity for work, certificate 21 9 et seq. – binding effect 21 9 et seq. – disproving accuracy 21 11 independent pensions 52 6 independent right 2 15 indirect transmission 81 11 information exchange – improvement 79 1 information obligation 87a 30 inpatient treatment 36 17 institution directory 1 19 insured person 1 6; TFEU 48 9 invalidity 3 13 – concept pre 44 pp 3 invalidity allowance 3 15 invalidity benefits 3 12 labour market – activation measures 82 10 labour market policy 3 24 language of another Member State 76 20 legal value of documents 76 18 legislation 1 15 liability law – exclusion 85 7 – social law 85 1 liaison body 78 6 long-term care pre 17 pp 23, 36 4

Lugano Convention AA 12 maternity benefits 3 8, pre 17 pp 19 medical benefits 3 10, pre 44 pp 5 medical examination – administrative checks 82 8 – choice of doctor 82 5 – degree of invalidity 82 7 – expenses 82 6 – special rules 82 2 – validity 82 4 medical examination of a claimant 82 1 members of the family – right to benefits in kind deriving from residence in a Member State with a public health service 32 1 ff method for calculating 62 1 migrant worker 52 11 minimum benefit 9 5 minimum income 59 5 minimum period rule 57 1 ministerial entity 1 17 mutual recognition of invalidity pre 44 pp 2 national rules – Luxembourg 87a 28 – UK 91 2 need for care 36 4, pre 44 pp 6 non-competent institution – erroneous contact 81 8 – resubmission to the competent institution 81 9 non-contributory systems 3 30 notification 9 1, 2 notification of instruments and decisions 84 39 obligation to bear the costs – health insurance of the pension claimant 22 14 obligatory membership pre 36 pp 9 occupational diseases 3 19, pre 36 pp 6, 38 1, 8 – aggravation 39 1 occupational integration pre 44 pp 5 occupational pension schemes 51 6 offsetting 84 5 – pensions with arrears 84 23 – provisionally paid contributions 84 13 – social welfare assistance 84 27 – unduly received benefits 84 19 old age benefits 3 16

551

Index old age pension 3 26 organ donation pre 17 pp 31 outpatient treatment 36 17 overlapping – compulsory insurance period 10 5 – voluntary insurance period 10 5 overlapping of benefits 10 6 overlapping provision 38 2 overlapping rules 10 1, 52 1, 4, 23, 53 6, 54 3, 55 8 overt discrimination 4 8 own rules 72 4 partial pensions pre 50 pp 4 partial unemployment 64 3, 65 4 paternity benefits 3 11, pre 17 pp 30 Patient Claims Directive – in relation to Reg. No. 883/2004 pre 17 pp 13 pay-as-you-go system pre 36 pp 13 pay continuation 3 30 pension 1 23 – calculation of 52 2, 10 – comparative calculation 52 5, 24 – hypothetical amount 52 13 – maximum amount 52 22 – partial pension 52 20 – theoretical amount 52 13, 15 pension claimants – health insurance protection 22 1 pensions – calculation 87a 17 – division of 55 7 – for miners 51 3 – for the self-employed 51 5 – overlapping of 53 3 – recalculation of 59 1 pension schemes pre 50 pp 1 period – of employment 1 22, 61 2, 7, 8 – of exposure 38 1 – of extension 64 6 – of insurance 1 22, 61 7, 9 – of residence 1 22 – of self-employment 61 8 personal data – protection 77 1 personal scope 2 1 person other than a frontier worker 65 8, 15 Petroni principle 5 8, 46 3, 57 6 place of employment 65 8

552

place of residence 1 20, 46 6, 65 8, 15 place of stay 1 20, 46 6 posting abroad 36 14 preferential treatment – principle of 46 3 pre-retirement 1 23, 3 17, 25, 66 1, 4 President of the Council 72 8 preventive benefits 3 24 principle of aggregation 6 1 ff, 4 ff, 61 7 – assimilation of facts 6 9 – equivalence of facts 6 3 – multinational aggregation 6 5 – qualifying periods 6 2 – voluntary insurance 6 10 principle of equivalence 5 1 principle of favourability 10 3 principle of integration TFEU 48 15 principle of provision of benefits in kind on behalf of another Member State 17 14 et seq. principle of territoriality pre 36 pp 1 private insurance bodies 85 6 proportionality pre 36 pp 12 pro-rata-temporis principle 46 4, 52 3, 12, 14, 25 provisional/advance payments 50 9 provision of benefits in kind on behalf of another Member State 17 2 – deficits 17 18 recovery of claim 84 31, 40 – taxation 84 35 – three steps 84 34 recovery requests – limitations 84 45 reduction provisions TFEU 48 8 reference period 62 1, 3 Reflection Forum 72 24 refugee 1 12, 2 4, 9 Reg. No. 1408/71 – further applicability 91 4 Reg. No. 574/72 – further applicability 91 4 Reg. No. 883/2004 – objective 84 1 regional benefits for the disabled in the Reg. No. 883/2004 pre 17 pp 28 registered partnership 4 17

Index registration in the Member State of residence – condition or entitlement to benefits in kind 17 22 rehabilitation benefits 3 10, 15, pre 17 pp 21, pre 44 pp 5 reimbursement pre 36 pp 8, 36 18, 41 2, 74 1, 7 – principle of 36 17 – waiving of 41 2 reimbursement obligation special IR 17 reimbursement of costs 65 17 reimbursement of costs to the insured person 19 26 et seq., 20 32 et seq. Relevant periods pre 61 pp 5 requested party 1 28 request for information 84 38 residence 1 14, 2 11 – concept 7 1 residence clauses – waiving of 7 3 residence directives 2 10 responsibility for benefits 44 2 retroactive effect 87a 7, 12 – periods of insurance 87a 10 retroactivity special IR 15 reverse discrimination 4 11 review of Annex III 87a 29 scope – material 3 2 search of work 64 4 seasonal worker 64 7 secretariat 72 7 self-employed frontier worker 65a 1 self-employed person 3 6, 61 1, 62 1, 2 self-employment 1 3, 2 2 service 36 17 Services Directive pre 17 pp 10 ship owner 3 32 sickness benefits 3 8, 30, pre 17 pp 19 et seq sickness benefits in kind 17 4 sickness cash benefits 17 4 social advantages 3 28, 37 social assistance 3 35, 36, 70 1 – exclusion of 3 33 social law and liability law 85 1 social security – branches 3 4

– compensation 85 4 – conventions 9 4 – term 3 7 social security claims – privileges 84 43 social security coordination 72 34 social security institutions – exchange of data 73 1 social security rights 72 33 social security schemes – particularities 83 1 social security systems – competences 81 1 – cooperation 76 1 solidarity – principle pre 36 pp 10 special benefits in kind – work accidents and occupational diseases 36 14 specialised body of the European Commission 72 3 special non-contributory cash benefits 3 31, 38, 70 4, 9 stateless person 1 12, 2 4, 9 State of employment 61 11 State of residence 36 14 statistical data special IR 18 stay 1 14, 36 13 step-children 1 13 structured electronic document 78 2 student 1 3, 6, 2 2 subrogation – national rules 85 5 subsistence income 70 11 survivor benefits 3 18 survivors 2 5, 14 Switzerland AA 6 table of concordance 46 5 taxation 70 14 Technical Commission for Data Processing 1 18 temporary nature of sickness pre 17 pp 20 territoriality – principle of pre 36 pp 1 the employer as the competent institution – cash benefits in the case of sickness 21 6 third country 2 12 third-country nationals 2 4, 10, 61 5 553

Index transitional law TFEU 45 5 transitional provision , 2, 87a 1, 5 – applicable legislation 87a 21 – entry of a new State 87a 13 – pensions 87a 14 – periods before the date of application 87a 2 – prevention of overlapping 87a 20 treatment abroad 36 16 type A systems 44 1, 3 type B systems 46 1, 4 unchanged situation 87a 24 undermining of the financial equilibrium pre 36 pp 12 undertaking pre 36 pp 10 unemployment allowance 3 23

554

unemployment benefits 3 14, 21, 26 unemployment insurance 3 14, 16 unemployment insurance scheme pre 61 pp 1 victims of war 3 40, 41 voluntary insurance 2 8, 15, 53 7 wages and salaries – average income 36 11 waiting list 36 17 whole unemployment 65 5 work accident benefits 3 19 work accidents and occupational diseases – special benefits in kind 36 14 worker 2 2 worker other than frontier worker 65 1