Provisional agreement on the update of EU rules on cross-border social benefits

The European Parliament and the Council have reached a provisional agreement on updating the rules for coordinating national social security systems, in a reform aimed at clarifying social rights in cross-border situations, supporting fair mobility of the workforce, and strengthening the fight against fraud.

In short

The provisional agreement updates the EU rules on the coordination of national social security systems and still needs to be formally approved by the Parliament and the Council. The reform targets five key areas: unemployment benefits, long-term care benefits, access to benefits for economically inactive individuals, family benefits, and legislation applicable to posted workers and individuals working in two or more member states. The text aims to provide clearer and more predictable rules for mobile workers in the EU and for citizens in cross-border situations. Stronger measures are foreseen to combat fraud, including against so-called "letterbox companies," and for a fairer distribution of financial obligations among member states. Member states are expected to cooperate better through a notification system, and employers will be able to access information and complete documents online, including through the Electronic Exchange of Social Security Information, EESSI.

The provisional agreement was announced on Wednesday by the negotiators of the European Parliament and the Council, and the Council specified that the understanding was achieved under the Cypriot presidency of the Council together with the Parliament. Both institutions state that the review aims to modernize the rules for coordinating national social security systems, making them clearer, fairer, and easier to apply.

The European Parliament emphasizes mobile workers and the protection of social rights in cross-border situations. According to the statement, the new rules are intended to facilitate the mobility of the workforce in the Union, while maintaining social protection in cases where citizens have moved to another member state. The text updates the rules regarding unemployment benefits for mobile workers and the export of unemployment benefits for individuals seeking employment in another member state.

The agreement also clarifies the rules regarding long-term care benefits and family benefits. Additionally, it strengthens the coordination and application of social security rules for posted workers, that is, for individuals temporarily sent by their employer to work in another member state. The Parliament states that the text also aims to ensure a fairer distribution of financial obligations among member states.

The Council's statement further details the architecture of the reform and shows that the draft regulation focuses on five key areas: unemployment benefits, long-term care benefits, access to social benefits for economically inactive individuals, family benefits, and legislation applicable to posted workers and individuals working in two or more member states. The Council also emphasizes that the review aims to further facilitate the freedom of movement of EU citizens.

A sensitive element of the file is the treatment of economically inactive individuals and their access to social benefits. The Council states that the text aims to clarify the circumstances under which member states can limit access to social benefits claimed by mobile EU citizens who are economically inactive. In parallel, the Council's statement shows that a coherent regime for coordinating long-term care benefits and new arrangements for coordinating unemployment benefits in cross-border cases is also proposed.

The Parliament insists on the dimension of application and control. The text provides for enhanced measures for identifying and combating fraud, including so-called "letterbox companies," firms formally created in one member state but used to avoid obligations or stricter controls in another. According to the Parliament, member states are expected to cooperate better to ensure that workers are covered by social security through a notification system. Employers will also be able to access the necessary information and complete relevant documents online, including through the Electronic Exchange of Social Security Information, EESSI.

Rapporteur Gabriele Bischoff stated that the reform comes after a difficult but necessary compromise. She said: "Today is a good day for millions of mobile workers. This reform has been long awaited, and we have taken an important step forward today, based on a difficult but necessary compromise. Almost ten years after the Commission's proposal, citizens will benefit from clearer and more predictable rules regarding the coordination of social security systems, including in terms of unemployment, family benefits, and long-term care benefits. At the same time, we strengthen cooperation between member states to better prevent abuses and combat social dumping. The free movement of workers is a fundamental right, but it must go hand in hand with fair and applicable rules."

On behalf of the Council, the Minister of Labor of the Republic of Cyprus, Marinos Moushouttas, linked the agreement to the freedom of movement in the Union. He stated: "Freedom of movement is a fundamental principle of the European Union, but persistent uncertainty regarding access to rights and social benefits prevents people from living and working in other EU member states. Today's agreement provides much-needed clarifications for EU citizens in exercising their right to free movement."

Both institutions emphasize that the file is not yet closed. The Parliament and the Council must officially adopt the provisional agreement before the new rules can come into force. The Council adds that the text will first need to be approved by both institutions and then formally adopted after legal-linguistic review.

In the background documents, the Parliament recalls three basic principles of social security coordination in the EU: citizens are covered by the legislation of only one state at a time and pay contributions in one state, all EU citizens have the same rights and obligations regardless of whether they are citizens of that state or another member state, and previous periods of insurance, work, or residence in other states are taken into account when granting benefits.

The review amends Regulations 883/2004 and 987/2009 on the coordination of social security systems. The file is an old and politically sensitive one, and the Parliament notes that the agreement comes almost ten years after the Commission's initial proposal.

Both the Parliament and the Council present the reform as a balance between freedom of movement, equitable access to social protection, and the ability of member states to prevent abuses and apply the rules more consistently in cross-border cases.