Social security is a key issue for persons exercising their fundamental right to free movement. But without co-ordination at European level national social security legislations may lead to disadvantages in the field of social security for European citizens and their families who move within the European Union. True free movement therefore needs protection of these rights. 

In 1958, the Council issued two regulations on social security of migrant workers which were subsequently superseded by Regulation 1408/71, supplemented by implementing Regulation 574/72. Nationals from Iceland, Liechtenstein and Norway are also covered via the European Economic Area (EEA) Agreement. On 1 June 2002, the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons apart from a few exceptions the provisions of Regulations 1408/71 and 574/72 which apply between EU Member States also apply in relation to Switzerland.

The sole purpose of these Regulations is to co-ordinate the Member States' social security legislation and not to harmonize their social security schemes. This means that the Member States' very different social security schemes offer a wide variety of rights to workers and the self-employed, including levels of benefit. Co-ordination of the Member States' legislation means that the Regulations do not replace the different national social security systems by a single European scheme.

Regulation 1408/71 lays down four main principles:

•  Equal treatment between nationals and non-nationals in terms of social security : migrant workers be included within the scope of social security legislative provisions and receive benefits on the same terms as those of national workers in the host country;

•  The need to determine formally which social security legislative provisions are applicable The principle is that a person is subject to only one country's legislation which, as a rule, is that of the Member State in which he or she is employed or self-employed. The State of employment is thus the "competent State" and the rights of the worker/self-employed person to social security benefits are decided by that State.

•  the maintenance of acquired rights or rights in the process of being acquired (assimilation and totalization); and

•  The payment of benefits abroad consists of eliminating any condition of territoriality imposed by social security legislation and concerns not only the worker but his or her family when they reside temporarily in a country which is different from that where the benefits are granted (export of benefits).

Member States are free to determine the details of their own social security systems, including which benefits shall be provided, the conditions of eligibility and the value of these benefits, as long as they adhere to the basic principle of equality of treatment and non-discrimination.

Originally, Regulation 1408/71 only covered workers but with effect from 1 July 1982 its scope was extended to cover the self-employed too. The Regulation also covers members of workers' and self-employed persons' families and their dependents, as well as stateless persons and refugees. In 1998, the Council extended the scope of Regulation 1408/71 in order to set civil servants on equal basis with general statutory pension rights prevailing in the Member States. Regulation 307/1999 of 8 February 1999 extended the scope of the Regulation to include all insured persons, particularly students and others not in gainful employment. Since, 1 June 2003 third country nationals as well as the members of their families and their survivors can rely on the EU provisions on co-ordination of social security, provided they are legally resident in the territory of a Member State and are in a situation which is not confined in all respects within a single Member State.

Regulation 1408/71 lists the social security benefits covered by the Regulation

•  sickness and maternity benefits;

•  invalidity benefits, including those intended for the maintenance or improvement of earning capacity;

•  old-age benefits;

•  survivors benefits;

•  benefits in respect of accidents at work and occupational diseases;

•  unemployment benefits;

•  family benefits.