JOINT COMMITTEE ON SOCIAL AND FAMILY AFFAIRS díospóireacht -
Tuesday, 28 Jan 2003

Vol. 1 No. 3

Scrutiny of EU Legislative Proposals: Presentation.

Chairman

At our last meeting we agreed to scrutinise European Commission Document COM2002/405 at today's meeting. The document and relevant briefing material have been circulated to members. Officials from the Department of Social and Family Affairs are present to brief the joint committee on the implications of the proposal. Other committees are also engaging in this exercise. We must pay particular attention to this responsibility which has arisen in the past 12 months as a result of legislation passed and the referendum on the Nice treaty. It is appropriate that officials of the Department brief the committee on the contents of the document because this is a new responsibility and we may not be familiar with the new requirements. After the briefing we will decide whether the document requires further scrutiny.

I welcome the officials from the Department who will brief us on the European Commission Document COM2002/405 and the implications of this proposal. I welcome Mr. Tim Quirke, principal officer, who is making a return visit to this committee after a short time and Ms Joan Gordon, assistant principal. I invite Mr. Quirke to present his briefing to the committee.

Mr. Tim Quirke

Thank you, Chairman. I circulated a draft statement outlining the main issue involved and I assume members have copies.

Before examining the proposal it is important to provide some background information on EU Regulation 1408/71. This regulation provides for the protection of social security rights of migrant workers and their families within the European Community. It does this by co-ordinating the social security laws of the various member states. It provides broadly for equal treatment with nationals of the member state to which the person has moved in terms of all aspects of social security. It determines the relevant legislation that applies, determining the country of insurance, for example, where a worker resides in one member state but is employed in another. The legislation applicable is usually that of the country of employment. It also deals with the principle of aggregation which involves adding together periods of insurance and equivalent periods completed by workers in various member states for the purposes, where necessary, of acquiring entitlement to benefits and pensions, determining the amount payable and the duration of such entitlements. It also deals with exportability, which means, the payment of cash benefits or pensions irrespective of where in the territory of the European Union the beneficiary or pensioner resides.

The aim of the regulation is to ensure that workers are not penalised in social security terms for having moved to take up work or reside in another member state and that they get the entitlements they have earned.

The amendment being proposed in relation to European parliamentary assistants relates to the rules for determining the relevant legislation that applies. These are set out in articles 13 to 17 of the regulation. The purpose of the rules is to determine which national social security system is applicable. This avoids situations where no legislation might be applicable and the person has no social insurance cover as a result. It also avoids situations where a person may be liable for contributions in more than one country.

The main provision is that a person is normally subject to the legislation of one member state only and normally that is the legislation of the country where the person is employed or self-employed. There are exceptions to this rule provided for in the interests of certain categories of workers. For example, a worker posted by his employer to work for him in a subsidiary of the firm in another country can continue to be subject to the legislation of the first member state. Auxiliary staff of the European Communities may opt to be subject to the legislation of the country of employment, or to the legislation of the member state to which they were last subject or to the legislation of the country of origin. The option may be exercised once and is effective from the date of entry into employment. There is a general exception provided for in article 17.

The European Parliament has now requested that special provision be made for European parliamentary assistants which, unlike most other workers, would give them a number of options. The main thrust of the proposal is that European parliamentary assistants would have the possibility to choose between the legislation of the member state where they are employed; or that to which they were last subject; or of their country of origin. For example, an Irish person who had been employed in the UK and went to Brussels to work as a parliamentary assistant could opt to be subject to Belgian legislation which is the country of employment, or UK legislation, the country of last employment, or Irish legislation, the country of nationality.

This proposal was presented in 2001 and it was referred to the Council. During a discussion of the proposal at the Council, a majority of member states indicated they would have no objection to what is being proposed as this chapter makes provision for exceptions to the general rule. However, the proposal is being made against the background of a major proposal to simplify the regulations generally. The effect of this proposal would be to add to the complexity of the regulations for a small category of workers and other categories could request similar treatment. A number of member states therefore have expressed reservations on these lines.

Ireland's position reflects these considerations. On the one hand, Ireland would have no objection specifically to what is proposed for the category of workers concerned. However, we are strongly committed to simplification of the regulations in the interests of all workers and the effect of this proposal would be contrary to this objective. We have therefore favoured a postponement of a decision on this proposal until the simplification proposals are processed, which may occur during the Irish Presidency in the first half of 2004.

The last stage of this process will be consideration of the overall proposal by the European Parliament as part of the co-decision procedure. The proposal could then be examined in that overall context. Finally, I would point out that there is currently provision under article 17 of the regulations to make special arrangements in relation to the legislation applicable if it is found to be in the best interest of the workers concerned. Ireland would be favourably disposed to using article 17 in any situation involving European parliamentary assistants.

Chairman

I invite members of the committee to ask questions. If members agree, I propose we hear all the questions first and the officials can then respond. We can facilitate supplementary questions if time permits. We have heard a comprehensive outline of the impact of this proposal on the social welfare position.

I have some questions. Basically, the thrust of this proposal is to avoid pitfalls where somebody is not covered, particularly for the self-employed. Is that the genesis of the proposal?

Mr. Quirke

That is one of the hallmarks of Regulation 1408. It will ensure that a person will be covered in some member state for social insurance. It will avoid a situation where there is no cover.

Chairman

Following on from that, it gives a flexibility as to where the person wishes to be covered, be it the country of origin, the country where they were last employed, or the country where they intend to be employed. Is that a fair presumption?

Mr. Quirke

The general rule for the majority of workers who go to work in any of the member states would be that the country of employment is where they would be liable for contributions. However, there are exceptions for certain categories, for example, auxiliary staff of the European Communities, where a special rule could apply. They would have the option of either the country of employment or the country in which they last worked or their country of origin. This is because there are special circumstances attached to that group of workers. It is that status which the European parliamentary assistants are seeking.

Deputy Ring

I have two questions. The European Parliament is looking after its staff working in Brussels from all parts of Europe. If people want to live there after they retire, they will be able to get all their benefits. If they were paying PRSI, would Irish people living in Brussels be able to get dental treatment there? People are certainly paying PRSI here but there is no service for it. Perhaps we could have some kind of deal allowing them to go to Brussels, England or somewhere else to get dental treatment. They are paying their dues here but unable to use the service because the Department is fighting with the dentists. Would we be able to work that one out?

Chairman

I do not like to stop Deputy Ring in full flight but that is off the point.

Senator Wilson

The Department is not fighting with the dentists; the dentists are fighting with the Department.

Deputy Carty

It will be settled today.

Chairman

We had better stick to the subject. This is a very specific regulation.

Deputy Callanan

Mr. Quirke is saying a person who works five years in Ireland, five years in England and five years in France is entitled to 15 years' contributions. Such a person could claim whichever was most beneficial. Is that the gist of what Mr. Quirke is saying?

Mr. Quirke

No, but that would come into play subsequently. Under the regulations, the pay contributions for periods worked in each member state will be aggregated for the purposes of determining benefit or pension. This issue refers to European parliamentary assistants who could work in Strasbourg or Luxembourg or both. The question is in which country should they pay PRSI and in which country should they be covered for social insurance purposes. That is the issue. The general rule is that for the vast majority of workers it should be the country of employment but, as I said, there are certain exceptions for members of staff of the European Parliament who have a better choice.

Deputy Crawford

I want to question where somebody can get social welfare benefit. For instance, a person living in Northern Ireland but working south of the Border who became unemployed was sent from an office in Dundalk to one in Newry and had difficulty finding what entitlements were due. This happened to a person who had worked all his life in the building trade as a PAYE worker. It seems strange that someone who had paid tax and PRSI here could not get his social welfare here.

Ms Gordon

I will try as best I can to answer that question which is unrelated to the proposal before us.

Deputy Crawford

It is covered by the——

Ms Gordon

It is covered by the EU Regulation 1408 provision which determines the competence state for payment of benefits. In the case described by the Deputy, the competence state is determined by whether the person is wholly unemployed or intermittently unemployed. If the Deputy wants to give me details of a particular case, we will certainly look at it. The person is entitled to benefits from one state or the other. We can check the matter out for the Deputy. It is not related to the legislation applicable, rather it is covered by EU Regulation 1408.

Chairman

Deputy Crawford can speak toMs Gordon in private.

Deputy S. Ryan

In the context of the proposed regulation, somebody who may have worked part-time in Ireland, then in England and another European country could be eligible for three contributions. Is that right? Will this proposal bring it all into one?

Ms Gordon

A person pays contributions in the country of employment. If such a person becomes unemployed or sick, the claim is generally made in the country of residence. A person who needs to aggregate periods of insurance to get entitlements can add together the UK and Irish contributions. In some cases there is no need to aggregate but the purpose of the aggregation is to ensure a person does not lose out on benefits by virtue of having moved to another member state.

Deputy S. Ryan

This applies, first, during a person's working life and, second, for pension rights.

Ms Gordon

Pension rights are slightly different in that each member state will pay a pension proportionate to a person's period of insurance in the country. In the case of a person who worked 15 years in the United Kingdom and 15 in Ireland, both countries will pay a pro rata pension.

Deputy S. Ryan

Is there only a single pension from one source?

Ms Gordon

No, a person would get two pensions. However, for short-term payments like unemployment or sickness, there is just one payment.

Deputy Connolly

Will the benefits be retrospective? I speak, in particular, about people who have returned from Britain where they paid PRSI for years. They often have difficulty having this recognised. Following on Deputy Crawford's earlier question, are there any wider implications for those living close to the Border? What other benefits are there for them, for example, those living in Northern Ireland but working in the South or vice versa? What effects will it have?

Mr. Quirke

In terms of the operation of the regulation, it will apply in Ireland from the date of accession in 1973. From that point on when it comes to determining entitlement to pension, all periods of insurance for any worker who worked in the United Kingdom, Ireland or France will be taken into account.

Deputy Connolly

Is the period before 1973 not taken into account?

Mr. Quirke

In terms of pensions, vis-à-vis the United Kingdom, we had a reciprocal agreement which was not made under EU legislation. In the vast majority of cases it will be taken into account going back to the first reciprocal agreement in 1959 or 1960. There are provisions for recognising periods when a person was working in one state or the other.

Deputy Connolly

Are there benefits for those living close to the Border?

Mr. Quirke

They would be on a similar basis to those that apply to the person working here, in the United Kingdom or France. The regulation will apply equally.

Chairman

The official position is that we are committed to the simplification of the regulations which represent a huge and complex area. Although it agrees with its thrust, the Government is not giving its imprimatur to the implementation of the regulation until it sees how it fits into the overall simplification process which it hopes to have completed in the next 12 to 18 months. Is that the official position?

Mr. Quirke

It is, yes.

Chairman

We have to make a decision in relation to our scrutiny of this particular regulation and will send a report to the Clerks of both Houses of the Oireachtas. We need to do so on the basis of an adequately informed position.

Mr. Quirke

What we are really trying to do is develop a consensus between member states. We do not want a situation in which a number of member states would have strong reservations in relation to the proposal. Our aim is to have an agreed position in going forward to the European Parliament and avoid having a veto applied to the proposal.

Deputy Crawford

Will this legislation have benefits for anyone from this country wishing to use their options?

Mr. Quirke

Yes, if the proposal is adopted.

Deputy Crawford

In that case, is it fair to say there is no justification for opposing it in that context, subject to appropriately simplified legislative provisions?

Mr. Quirke

A number of member states consider that, when we are in the process of dealing with a major reform of the main provision, it is somewhat inopportune to discuss a particular proposal which will add complexities to it.Perhaps when we see how far we can go in terms of simplification, we can then look at the issues that are causing problems and the possible extension of this group to the special category status.

Deputy Crawford

Are there any current problems in relation to substantial long-term issues?

Mr. Quirke

No.

Chairman

We have had a good discussion and obtained an understanding of the issues. I thank the Department officials for their replies to the questions raised. Does the Committee wish to make a specific recommendation in relation to this proposal, in the light of the information provided?

Deputy Ring

The thrust of this legislation is in the context of the EU looking after its workers, in terms of their moving from one EU country to another and making provision, by way of their contributions, for their entitlements on return to their home country at a later stage. I support the position of the Irish Government in seeking a consensus in that regard in the interests of Irish people working in Brussels or wherever. Perhaps the Department could report back to the committee at a later stage on developments in Brussels in respect of this matter and the attitude of other member states to it. We are now aware of the positive features and perhaps we could be briefed on any negative aspects arising.

I am not in a position to make a judgment on the matter today regarding what will be the right outcome for this country. I suggest that, if a consensus is reached between the member states and within the European Parliament, the Department should then inform this committee of the up to date position before we actually ratify the measure.

Chairman

It appears that we have no specific concerns in relation to the proposal at this stage. We can, of course, reserve our position with a view to evaluating the implications of any issues arising from consideration of the proposal by other member states. Perhaps the Irish Presidency of the EU will provide an opportunity to advance matters towards a consensus position. Clearly, we see the benefits for certain categories of workers and we do not wish to deny them the opportunity to advance their position. In the absence of specific concerns within this committee in relation to the finer details of the proposal, having subjected it to examination with the assistance of the Department officials, I suggest there is nothing to preclude its being progressed further.

Deputy S. Ryan

On the contrary, I am in favour of postponing a decision until 2004, provided it is acknowledged that when the regulations come into operation, whether by consensus or majority decision, to implement the scheme as from 2004, there will be a retrospective element for anybody who would have benefited up to that time.

Chairman

I do not see any proposed implementation date on the proposed regulations at this time.

Mr. Quirke

No. As I said earlier, a great deal of work has been done over the past three years in terms of simplifying the main regulation and that work is ongoing. The objective is to have the regulation agreed at Council by the end of this year and agreed by the European Parliament by April of next year, when, I understand, the Parliament comes to the end of its current term of office. In that context, it appears that the main simplification should be out of the way by the end of this year or early next year. At that time, we will have a definite view from member states on this proposal for parliamentary assistants.

Chairman

As I understand it, the committee has no observations to make at this time, but we reserve the right to make any appropriate observation early in 2004, when further progress has been made in relation to the position of other member states. Is that agreed? Agreed.

Mr. Quirke

It may be useful, at that stage, for the Department to give the committee a full outline of the proposal as it stands then.

Chairman

Yes, we would welcome a further briefing from the Department. I am sure my colleagues will agree that today's briefing has been extremely helpful in setting out the background to the proposal. The detail of regulations can be difficult to follow for anybody who is not dealing with the issues on a day-to-day basis. We wish the Department well in the effort to achieve simplification of the overall regulation. On behalf of the committee, I thank the Department officials for their attendance at this meeting and for the explanations provided. We look forward to their return to a future meeting of the committee when there is further progress to report.

The joint committee went into private session at 2.38 p.m. and resumed in public session at2.40 p.m.

Chairman

We have given the regulation some degree of scrutiny and assessment and the committee recommends that there are no observations to make at this point, but that it reserves the right to return to examine this regulation in early 2004. We request the officials of the Department to return to the committee when further progress has been made with regard to attaining the unanimous decision at EU level as to the implementation of the particular EU regulation. I believe that is a fair summary of the position.