Social security coverage of non-active persons moving to another Member State:

The chicken or the egg?

F. Van OvermeirenGhent University

trESS bilateral seminar EE-FI, Tallinn, 4 September 2012

Context

• From trESS-CASSTM topic (2009) to highest political level (EPSCO Council June 2011): R-883/2004 vs D-2004/38?

• 2010 Note from the Secretariat (EC): first legal analysis

• 2010 Adm. Comm. Notes from the Member States: several concerns with regard to “non-active persons and access to social benefits”

• EC & Member States: need for further analysis: 2011 trESS Analytical Study

• 2012 Follow-up in the Adm. Comm.

Overview of the legal framework

• Residence and equal treatment rights of economically inactive EU citizens under D-2004/38

• Right to free movement as a fundamental right (art. 21 TFEU)• Direct effect / Derogations to be interpreted restrictively

• Conditions and limitations in D-2004/38• Residence +3 months: Sufficient resources / comprehensive sickness insurance• Expulsion may not be the automatic consequence of social assistance claim + only if

“unreasonable” burden on the public finances

• Entitlement to social assistance under D-2004/38• Principle of equal treatment• No social assistance during the first three months of residence (+ jobseek)• “Social assistance” in D-2004/38?

Overview of the legal framework

• EU social security coordination rights for economically inactive EU citizens (R-883/2004)

• Residence: “centre of interest” according to a factual assessment by the MS (cf. criteria in Article 11 R-987/2009)

• Coordination of health care• ‘Lex loci domicilii’ for economically inactive persons• In certain cases at the expense of another MS (cf. pension state)• If not: principle of equal treatment in MS of residence

• Coordination of SNCB (“mixed benefits” between social security and social assistance)• Under the material scope of R-883/2004 (Annex X) >< “pure” social assistance• Excluded from the principle of export of benefits (>< early ECJ case law)• Only in the Member State of residence

Outcome of the trESS fact-finding analysis

• Fear for social tourism; • Increase in claims from non-active persons; • Unclear relationship between R-883/2004 and D-

2004/38.• Lack of convincing national facts&figures: therefore, no

concrete need for immediate action detected

Current state of EU law

• Relationship between R-883/2004 and D-2004/38

• Main priority question: “First legality of residence, then coordination

(=entitlement to SNCB, health care)” or “first coordination rights, then legal residence (using coordination rights to establish legal residence)?”

Current state of EU law

• Current texts of R-883/2004 and D-2004/38: no direct influence THUS separate and full application of both instruments:

• No reference to “legal residence” in R-883/2004: only factual residence // Article 11 R-987/2009

• Origin of “sufficient resources” under D-2004/38 not relevant, but what with social security benefits of the host state?

• Health care and SNCB as “social assistance” within the meaning of D-2004/38? HC certainly not, SNCB most probably not (undermine the balance of the SNCB-system)

• EU citizenship case law: Treaty-based equal treatment right and the “genuine link” justification (degree of integration for entitlement to welfare)

• Influence of the “genuine link” on R-883/2004 residence concept?

Current state of EU law

• R-883/2004 notion of residence

• Formally accepted: SNCB in MS of residence (balance to avoid exportation) + equal treatment for residence based health care in competent MS of residence (Art. 3 R-883/2004)

• Substantially close to a “genuine link” assessment: a factual analysis of relevant individual circumstances (cf. Article 11 R-987/2009)

Current state of EU law

• Anyway too much room for different interpretations of the relationship: ambiguous situation, e.g.:

• AT: “Suppl. Pension” (cf. C-140/12, Brey) legal residence!

• FR: “Residence based health care scheme” legal residence!

• …?

trESS proposal on future perspectives

Legal reasoning >< political perspective

Route 1: “CLARIFICATION”

• A safeguarding clause for R-883/2004 in D-2004/38 (like in R-492/2011)

• A definition of social assistance in D-2004/38

trESS proposal on future perspectives

Route 2: “RECONCILIATION”

• A flexible (!) waiting period in the residence concept of R-883/2004 for the application of the special coordination regime for SNCB’s + limited export of SNCB

• A cost compensation mechanism between the former and the new Member State of residence for residence based benefits granted to non-active persons

trESS proposal on future perspectives

Route 3: “FOCUS ON RESIDENCE”

• Substantiating residence notion of Article 1(j) R-883/2004

• An enhanced focus on the assessment of the establishment of residence in the Member States in order to prevent confusion and cases of fraud and abuse

• The introduction of an “abuse of rights” clause with regard to the residence concept in Regulation 883/2004

Follow-up in the Adm. Comm.

• “Ad Hoc Group on residence”: how to tackle legal uncertainty?

• Main focus: Ways to better define and limit (transfer of) residence

• First report expected in Spring 2013

• Coordination with UK initiative at political level?

Thank you for your attention!

Questions?

Filip.VanOvermeiren@UGent.be