EP approves clearer social benefits rules for EU workers living or working in another EU country

The European Parliament voted on July 7 to approve a revision of EU social security coordination rules to ensure fair and clear access to social security for EU workers who live or work in another EU country.

The long-awaited update of the regulation on social security coordination, provisionally agreed between the European Parliament and the Council of the EU, introduces clearer criteria for determining which country’s social security legislation applies for EU workers who live or work in another EU member state.

It also encourages member states to share necessary information promptly in order to identify errors or fraud, including abusive practices, such as letterbox companies. The text was adopted by 511 votes in favour, 87 votes against, and 61 abstentions.

The law clarifies how periods of work, self-employment, or insurance cover undertaken in different member states are counted when assessing entitlements to unemployment benefits.

People who go to another EU country to look for work will be entitled to receive unemployment benefits for six months from the country they left. This period may be extended until the end of their entitlement.

For cross-border workers, it is clarified which member state is responsible for paying benefits. If a cross-border worker has been employed, self-employed, and/or insured for an uninterrupted period of 22 weeks in a member state other than their country of residence, benefits will be paid by the country in which they work.

The updated rules increase legal certainty for people who need care and those who care for them. It adds a new definition and a list of long-term care benefits covered by these rules.

There is also a clearer distinction between family benefits in cash, intended to replace income when a person gives up or reduces work to raise a child, and other family benefits. This will promote a more equal sharing of child-raising responsibilities and removes possible financial disincentives for parents who reduce their working time to care for their child.

Workers or self-employed persons sent abroad for up to 24 months (not replacing a previously sent employee) remain insured in the EU country where their employer is established or where they normally pursue their self-employed activity. To tackle fraud and errors, they must have been affiliated to social security in their home country for at least three months before being sent abroad.

The text also introduces a mandatory prior notification system: when a worker carries out activities in another EU-country, the competent authorities of the home member state must be notified in advance. This will not apply for business trips and short-term postings of a maximum of three days, though the construction sector is not covered by this exception.

For workers carrying out activities in two or more member states, the updated law helps determine the “registered office or place of business” of the employer or business to help establish which member state’s social security legislation applies. To do so, relevant factors include the place where essential decisions are taken, where the turnover is generated, and the places where the general meetings are held.

In line with decisions by EU Court of Justice, EU citizens who neither work nor actively search for a job should not be prevented from contributing to a sickness coverage scheme.

(Photo, of the European Parliament building in Strasbourg: Clive Leviev-Sawyer)