On 1 May 2010 new rules on the coordination of social security systems within the European Union started to apply by the implementation of Regulation (EC) No 883/2004 and No 987/2009. These regulations supersede the previous Regulations No 1408/71 and No 574/72. The new rules are now applicable in the EU Member States and later also in the EES-countries (Norway, Iceland and Liechtenstein) and Switzerland since separate agreements are needed in these countries.
In order to facilitate free movement and to avoid employees who work in different Member States not being adequately covered in either of these Member States, the above mentioned regulations contain coordination rules for the social security systems. The purpose is to ensure that there is always one applicable social security system. It is still up to each country to determine what social security benefits to apply. The basis for the new rules is, in principle, the same as before, but the rules entail, inter alia, the following changes.
The new regulations have a wider scope of application in such a way that they now apply not only to students, employees, retired citizens and their family members, but to all citizens within the European Union. The coordination rules now include not only maternity but also paternity benefits.
The rules for posting of employees abroad have changed. An employee assigned to work on behalf of his/her employer in another Member State is subject to the social security system of the country of origin, provided that the period of work does not exceed 24 months and that the employee does not substitute another employee. In previous regulations the time limit was twelve months with an extension possibility of another twelve months.
Previously an employee with employments within two different countries was subject to the social security system of his/her country of residence, provided that he/she regularly performed part of his/her work in the country of residence. There were no demands on the quantity of work to be performed in the country of residence. Now at least 25 percent of the work has to be pursued in the country of residence.
If less than 25 percent of the work is pursued in the country of residence, the employee is subject to the social security system of the country of work. If the employee has more than two places of employment, he/she is always subject to the social security system of his/her country of residence.
Under the new regulations it will be easier for unemployed persons to travel to another Member State in order to seek employment due to the increased possibilities to take their unemployment pay with them to another Member State. In certain circumstances, an unemployed person who moves abroad to look for work is entitled to keep his/her unemployment pay for up to six months.
In certain cases, the new regulations impose higher requirements on the cooperation between the authorities in the respective countries. Certain rules are implemented on how countries should agree on which country's legislation is to be applied. In order to prevent that employees are not covered by any of two social security systems, benefits are to be paid on a temporary basis until a possible dispute in the matter has been resolved. In order to improve and speed up the cooperation between different countries, a joint IT system for exchange of information is to be implemented in 2012.
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