Coordination of unemployment benefits

An overview of the current rules in Regulation 883/2004

trESS Seminar UK, Nottingham, 26 June 2013

Filip Van Overmeiren

Background thoughts

UB = “benefit covering the risk associated with the involuntary loss of revenue

whilst still being able to work” (no definition in Reg. 883/2004)

Close links with general employment policy of the Member States + decisive “availability for the labour market” Connected to state of the labour market

Control on active job seeking

Activating measures (longer working, youth unemployment, contribution/benefits)

Essential: supervision on job seeking efforts → residence clauses >< EU law (but: permitted by Regulations)

Not “fully coordinated”

Main coordination principles

Lex loci laboris for applicable legislation (limited, cf. “frontier workers”)

Equal treatment

Aggregation of periods (limited, cf. “periods of insurance”)

Assimilation of facts/income/benefits (limited, cf. “calculation of benefits”)

Export of benefits (limited, cf. “strictly conditional export”)

Principle: lex loci laboris

• Vincent, a Belgian national

• Works in UK

• Resides in UK

• Becomes unemployed

Principle: lex loci laboris

If one becomes unemployed in a Member State, the latter will apply its

legislation (+ equal treatment principle)

Principle: Competent state (applies its unemployment legislation/grants benefits)

= state of last employment

Article 11,2: person receiving unemployment benefits is regarded as pursuing his former activity which gave rise to the receipt of those benefits

>< Article 11,3,c: person receiving UB from his MS of residence (cf. frontier workers) in accordance with Article 65 are subject to the legislation of that MS

Principle: Aggregation of periods

• Peter, a Dutch national

• Resided and worked in Belgium for 5 years

• Moved with his family to Germany to work there

• Becomes unemployed after 6 months

Aggregation of periods (Art. 61 BR):

Qualifying periods [1-2 years insurance / (self-)employment]

If the acquisition, retention, recovery or duration of the right to unemployment benefits is conditional upon fulfillment of periods of insurance, employment or

self-employment Aggregation rules fully apply to all periods in another MS

Portable document “U1”

BUT: If the right to unemployment benefits is conditional upon completion of

periods of insurance Periods of employment or self-employment in another MS are only aggregated to the extent

that they would qualify as periods of insurance had they been completed under the applicable legislation

For the application of the above aggregation rules: abovementioned periods needto be most recently completed in the MS where the claim is submitted

Calculation of benefits (Art. 62 BR):

If based on the amount of the previous salary or professional income

ONLY salary/income received for last activity as (self-)employed person under that legislation is taken into account

Idem for reference periods for the determination of the salary serving as the calculation basis

BUT: When receiving UB from the MS of residence: salary / professional income in MS of last activity is taken into account

Principle: Export of benefits

• Franz, a German national

• Resided and worked in Denmark for 5 years

• Becomes unemployed

• Wants to look for a job in Spain

Export of unemployment benefits:

Principle of non-exportability (accepted by ECJ, cf. Testa)

Export possible, but under very strict conditions:

Registration for at least 4 weeks with the employment service of the competent state before departure (derogation possible)

Registration with the employment service of state of job seeking + subject to control procedure and conditions (deemed to be fulfilled before registration if registered within 7 days after end of availability in competent MS)

Return to the competent state within 3 months – extendable up to 6 months

Returning in time = continued entitlement in competent MS, if NOT: SANCTION: loss of benefits, unless more favourable legislation of competent MS

Export is permitted several times per unemployment period (in total maximum 3 or 6 months)

Export of unemployment benefits:

Benefits are paid directly by the institutions of the competent state

Practical approach

Prior to departure – application for document confirming right to benefits in competent state (U2-form)

Information obligations vis-à-vis the unemployed person

Information exchange between institutions of both states

Control by institutions of state of stay

Special rules for workers who resided outside the competent MS

• Pierre, a French national

• Works in Belgium

• Resides in the Netherlands

• Returns home every day

• Becomes unemployed

OR

• Sean, an Irish national

• Performs seasonal work in France

• Resides in Poland

• Becomes unemployed

Special rules for workers who resided outside the competent MS

A. Frontier workers

1. “Typical” frontier worker

= person employed in the territory of a state other than the state of residence (return at home at least once a week) – best chances in MS of residence(?)

2. A-typical frontier worker

= frontier worker maintaining close personal and business links in the state of last employment giving him better chances of finding new employment there (Miethe-case)

B. Workers residing outside of the competent state, other than frontier workers

e.g. seasonal workers, international transport workers, other workers simultaneously employed in different MS

C. Wholly or partially/intermittently unemployed

depending on contractual link with employer – cf. employment relationship suspended (duration irrelevant) = partially unemployed

Frontier workers

1. Frontier worker

Partially or intermittently unemployed

Legislation of the state of employment (available to employer/employment services, benefits)

Wholly unemployed

Legislation of the state of residence (available to employment services, benefits)

Optional registration as job-seeker in state of last activity

Frontier workers

2. A-typical frontier workers

Partial or intermittent unemployment

Legislation of the state of employment (available to employer/employment services, benefits)

Full unemployment

Legislation of the state of last employment (available to employment services, benefits)

Jeltes: UB from MS of residence + optional registration in MS of last activity, but no benefits (ECJ legislator wins)

Workers who resided outside the competent MS, other than frontier workers

Partially or intermittently unemployed

Legislation of the state of employment

Wholly unemployed

Availability to employment services and benefits

Legislation of the state of last activity (if no return to MS of residence)

Legislation of the Member State of residence (upon return there)

However, upon return after receiving benefits from MS of last activity:

as long as export is permitted (3/6 months) benefits from MS of last activity

afterwards benefits from MS of residence

Workers who resided outside the competent MS, reimbursement between institutions

Principle: if benefits provided by the MS of residence

benefits at expense of MS of residence

Exception: reimbursement by the MS of last activity

3 months (full amount of the benefits)

5 months, if at least 12 months of (self-)employment within the state of last submission during the 24 months preceding the unemployment

Capped reimbursement: maximum = amount of benefits in state of last activity

• Rosita, a Spanish national

• Works as a self-employed person in Portugal

• Resides in Spain

• Returns home every day

• Becomes unemployed

Self-employed workers residing outside the competent

Self-employed activities in MS of last activity But no unemployment benefits system for self-employed persons in MS of residence

MS of last activity (available to employment services and benefits)

As a supplementary step: available to employment services of MS of residence

Switch possible to availability to employment services of the MS of residence only, using the limited export possibility – export possibility may be extended from 3 months till the end of benefit entitlement

Challenges

Different interpretation of the aggregation principles Limited export vs. labour market reality Limited export vs. EU citizenship case law Different criteria for extension of export period Residence state principle vs. jobseeking reality Residence state principle vs. fair burden sharing Residence state principle vs. administrative burden Problems with PD’s and SED’s (wrong, delayed, …) and monthly Different interpretations of case law (cf. Miethe (/Jeltes), Huijbrechts) Determination of the MS of residence

Thanks for your attention!

Filip.vanovermeiren@ugent.be