Inside the Commission: update on the coordination of family benefits

Mr Radek Časta is a Legal Officer of the Unit “Free movement of workers and coordination of social security” of DG Employment, Social Affairs and Inclusion. He took up this responsibility in December 2006. Before that, he worked as a lawyer in the private and public sector in the Czech Republic and in Germany from 1996. We found him prepared to enlighten us on the status questiones with regard to the coordination of family benefits.

trESS: Mr. Časta, thank you for your time. Could you first explain to us whether the coordination of family benefits is a topic of major importance in your unit or whether it is “less present” than topics like applicable legislation or the coordination of old age pension or sickness benefits?

R. Časta (RC) : As any other area of social security coordination, family benefits represent an important part of our work. It is for sure less present than cases on applicable legislation. However, the Commission is receiving a significant number of questions and complaints concerning family benefits and also the ECJ is confronted regularly with preliminary questions submitted by the national courts concerning this field and its coordination at the EU level.

trESS: Have you seen major changes or new burning issues since the introduction of the new Regulations on 1 May 2010?

RC: The new Regulations consolidated the provisions on family benefits in only one Chapter in each Regulation. The text is much more readable now than it was before. Also the removal of the distinction between family benefits and allowances is remarkable. In that respect, we can see a real simplification. The new Regulations also stress the need to provide the family benefits without delay, if necessary on a provisional basis. Nevertheless, the text of the new provisions and their interpretation and EU wide application are two different matters. There are some burning issues in this field, but I would not call them new. For example, with regard to the definition of family members, there were divorced parents, step-parents or extramarital children 40 years ago as well. However, such factual situations still inspire many questions and discussions today, sometimes based on misunderstandings among the national experts and competent institutions.

trESS: What are, from your experience within the European Commission, the most common problems in the domain of the coordination of family benefits?

RC: The national systems in this field are very diverse and a child's parents might often fall under the legislations of different Member States. The determination of entitlements in different Member States and the anti-overlapping provisions ensuring that the family shall receive in total the highest sum, but not be paid twice for the same family member, are complex and can get fairly complicated. The most common problem in this field is, from my point of view, the lack of proper and swift administrative cooperation between the competent institutions of the Member States. The composition and factual situation of the family must be clarified and it takes sometimes ages until a decision is delivered to the applicant and the benefits are paid.

trESS: Does the Commission plan to counter these problems in some way, e.g. by adapting the current rules?

RC: At the moment, the Commission does not foresee substantive legislative changes in this field. One must not forget that the new rules were negotiated in the Council and the Parliament for almost ten years and have applied for only two years since May 2010. I think we should first focus on the common interpretation of the current rules. The interpretation should find a broad consensus and must be in line with the rules of the EU Treaty on the free movement of workers and with the case law of the ECJ. The interpretation is the task of the Administrative Commission but also of the national institutions and courts when dealing with the cases on a daily basis and applying the EU provisions. As I said, one of the main challenges is to speed up the exchange of information. On this front, the developments are ongoing. We should have new paper forms for the exchange of information by the end of the year and in a few years' time also a full electronic exchange of information throughout the whole EU. This should considerably speed up the processes, not only in the family benefits field.

trESS: Do you see certain trends in the social security legislation of the Member States which could have an impact on the family benefits chapters of the coordination Regulations?

RC: Yes, definitely. The Member States modernise and adapt their national systems and policies on a constant basis. There are, for example, flexible income-base calculated parental benefits in some Member States. I can also see a tendency towards the "regionalisation" of family benefits. Some regions or even municipalities of a Member State provide additional family benefits but usually linked to a long-standing residence in the appropriate region. This is of course a problem for migrant workers and contrary to EU law if they are denied the benefit.

trESS: The coordination system provides for clear priority rules in cases where several Member States are liable to grant family benefits. Could you explain them briefly? Is it always crystal-clear which Member State is responsible?

RC: I think that the conflict rules were very much improved in comparison to the old Regulations. There is now a clear cascade of priorities. In the case of benefits due in more Member States for the same period and for the same family members, you will firstly receive the benefit from the State where you are employed or self-employed (even if you and your family members do not reside in this State), secondly the benefits from the State paying a pension and lastly from the State of residence. If the right to benefits is based on the same grounds, for example both parents are employed but in different Member States, there are additional criteria how to determine the primary and secondary competent State based on the child's residence or the length of the insurance period. The objective of these provisions is to ensure that the family receives in total the highest sum available from all countries involved, but it is not necessarily the State with the highest benefits which pays first as a primary competent State. This makes the coordination in this field so complex.

trESS: An important basic rule in the coordination of family benefits is indeed that citizens are always entitled to the highest amount. If the benefits they receive from the competent Member State turn out to be lower than what they would have received from another Member State where they had rights, the latter will have to pay a supplement corresponding to the difference between the two benefits. Does this process of comparison run smoothly at all times or do people in practice sometimes loose the supplement?

RC: People cannot lose their right and I am convinced that in the vast majority of cases, it runs smoothly. As I said before, the information exchange can take some time. Eventually, people will receive the benefits. There are also individual cases where this is not the case. Mostly this is due to the lack of proper administrative cooperation. Occasionally, there are also different views with regard to which State is primarily competent and which secondarily. And finally, there are also some interpretative issues and open questions concerning EU law and the case law of the ECJ from the perspective of national law. In any case, if any of your readers is of the opinion that he or she is not receiving what is due to him or her under the national legislation, I invite them to take recourse to the national institutions or courts. They are obliged to apply not only national law but also EU law and the European case law.

trESS: A brainteaser to conclude. What are your expectations as to the future developments following the judgement in Joint Cases C-611/10 and C-612/10 Hudzinski and Wawrzyniak, in which the EU Court obliged a non-competent Member State according to Title II of Regulation No 883/2004 to grant the difference up to the level of its family benefits anyway? This certainly came as a surprise to everyone who is working in the field of social security coordination. Do you see this as a Union citizenship-driven move from the EU Court and how will this influence the coordination of family benefits or even the coordination of all social security benefits as a whole?

RC: We will see. The tendency in providing the maximum possible social standard to migrant workers in this field is clear in the case law of the ECJ and was already obvious in the famous Bosmann case (C-352/06). We need to analyse the consequences of the current case law, discuss with the national experts in the Administrative Commission and wait for possible additional judgements and clarifications. In any way, it seems that the coordination of family benefits is becoming even more complex than it was the case before.

As it is a holiday period now, I would like to conclude with a summer brainteaser for your readers:

A mother resides in Member State (MS) A. She is receiving an old age pension from MS B and is employed in MS C (where she will reach the pensionable age in two years' time). Her daughter is residing and studying in MS D. The father resides in MS E and works in MS F. The daughter is "mainly dependent" on both parents who provide her with regular payments covering the majority of her living costs. All Member States (A-F) provide family benefits only on the basis of the residence in the respective MS in the amount of: MS A – 100 €, MS B – 70 €, MS C – 60 €, MS D – 150 €, MS E – 120 €, MS F – 50 €. Which MS shall pay how much family benefits according to Regulations 883/2004 and 987/2009?

I would be pleased to receive a reply from your advanced readers with their legal justification by the end of August at

trESS: Thank you very much!

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