Equal Treatment, Social Security, and Human Rights: Learning from O.D. and others v Istituto nazionale della previdenza sociale (INPS)

Introduction

In the approach to migration and social security, the case of O.D.  v Istituto nazionale della previdenza sociale (INPS) (C-350/20) illustrates how to secure the lives of people who move to other countries to lawfully reside and work there. It is a text-book example of how real-world issues that affect people moving through the ordinary incidences of life (such as working and having children) can be resolved. It provides a valuable lesson in multilateral co-operation and shows how one country’s citizens and others may benefit from arrangements that protect and support them when they journey out into the world.  The case is a judgment from the Court of Justice of the European Union (CJEU) and it concerns what happened in Italy. But it also contains valuable lessons for people in the UK as they seek to extend and develop bilateral and multilateral agreements in the European region and beyond.

Fundamental Rights

The jumping off-point is the weak protection of social rights in the EU legal order and their subordination to the will of legislatures that have democratic mandates to make tax and spend decisions in each country. The EU Charter of Fundamental Rights (CFR) contains weak protection for social rights. Article 34(1) CFR provides:

Article 34 – Social security and social assistance

1. The Union recognises and respects the entitlement to social security benefits and social services providing protection in cases such as maternity, illness, industrial accidents, dependency or old age, and in the case of loss of employment, in accordance with the rules laid down by Union law and national laws and practices.

Social Rights in Legislation – Democratic Accountability

In Article 34 CFR there is a right to social security protection as regards the main incidences of life (babies, illness, accident, unemployment, old age, etc.) but in each EU state this right is subject to the laws made by the national parliament and the EU parliament. In that way, democratically elected legislators get to decide how much money is to be spent on social security. Put another way, parliamentarians not judges get to decide the extent of the social rights they wish to provide. To understand what these democratically elected politicians have decided, it is necessary to look next at the laws they have made.

A Common Position for Lawful Residence and Work – The Single Permit Directive

For non-EU citizens/third-country nationals the EU’s Single Permit Directive (2011/98), provides (among other things)  that where they are legally residing and working in an EU state, they enjoy at least a common set of social rights, based on equal treatment, together with the citizens of that state, irrespective of the initial purpose of, or basis for, admission to that state (i.e. regardless of whether they were admitted for the purpose of work or family reunion, etc.).

The Single Permit Directive is made by the Council of Ministers (government ministers from each EU state, each one democratically accountable to the citizens of their own country) and the European Parliament (democratically elected). In the Directive provision is made for equal treatment in terms of access to social security. Even then, by referring to the Co-ordination of Social Security Regulation (883/2004), the scope of provision made for third-country nationals defers to the choices made by national governments as regards the extent of social security provision. Thus, it introduces a further layer of democratic accountability:

Article 12

Right to equal treatment:

1.      Third-country workers as referred to in points (b) and (c) of Article 3(1) shall enjoy equal treatment with nationals of the Member State where they reside with regard to:

(e)      branches of social security, as defined in Regulation No 883/2004;

2.      Member States may restrict equal treatment:

(b)      by limiting the rights conferred on third-country workers under point (e) of paragraph 1, but shall not restrict such rights for third-country workers who are in employment or who have been employed for a minimum period of six months and who are registered as unemployed.

In addition, Member States may decide that point (e) of paragraph 1 with regard to family benefits shall not apply to third-country nationals who have been authorised to work in the territory of a Member State for a period not exceeding six months, to third-country nationals who have been admitted for the purpose of study, or to third-country nationals who are allowed to work on the basis of a visa.

As can be seen, national governments may make restrictions in the first six months of person’s residence or beyond that where the basis of admission to that country is not in order to work but for some other purpose.

The Practical Problems addressed by Social Security Protection

In order to find out what branches of social security are covered by this equal treatment provision, one has to turn to the EU Regulation that co-ordinates the different social security systems of the EU states (Regulation 833/2004). That regulation provides a way for people who earn or acquire social security rights in one country, to use them in another. However, critically, it leaves the substance of the provision made for social security in each country to the parliament of that country.

The democratically elected parliament of each country choses the extent of its social security provision and spending on social security. Where it provides access to its own citizens to work and thereby earn social security entitlements, so too must it do so to lawfully resident, third-country nationals who are also working and paying taxes and social insurance contributions.

The Regulation covers sickness benefits; maternity and equivalent paternity benefits; invalidity benefits; old-age benefits; survivors’ benefits; benefits in respect of accidents at work and occupational diseases; death grants; unemployment benefits; pre-retirement benefits; and family benefits. These are the sorts of benefits that people earn through work and payment of social insurance (in the UK, national insurance). They are not means-tested welfare benefits based on assessment of individual need but entitlements people acquire through their own efforts.

The Italian provisions

At issue in O.D. v INPS was access to the childbirth allowance and maternity allowance. The third-country nationals in question were residing legally in Italy and held single permits that entitled them to live and work there. However, they did not have long-term residence status (free of time restriction as to the period for which they could remain) and under Italian law that lack shut them out from these benefits. In response, they relied on the equal treatment provisions of the Single Permit Directive to challenge this exclusion. Among other things, the INPS argued that the childbirth allowance was a premium payment that fell outside the field of social security, its object being to raise the Italian birth rate.

The Judgment of the Court of Justice (CJEU)

In its judgment, the Court took the point that the scope of the social rights in issue was determined by legislation. It was only by reference to the Regulation 883/2004 (which co-ordinates the provision made in each country), that the equal treatment provisions of the Single Permit Directive give specific expression to the entitlement to social security benefits provided for in Article 34 CFR.

However, once an EU state had adopted a measure (such as the law providing for childbirth allowance and maternity allowance) that came within the scope of application of a directive (such as the Single Permit Directive)  and that gave specific expression to a fundamental right (such as a social right)  provided for by the CFR , the EU state had to comply with that directive, see for example  the case of Schmitzer, C‑530/13 foran illustration of the settled case law on this point.

The Court held that the Italian childcare allowance was a ‘family benefit’ and the maternity allowance a ‘maternity benefit’ within the scope of the Co-ordination of Social Security Regulation (883/2004). They were cash benefits intended to meet expenses. The benefits were granted automatically to households satisfying certain objective criteria, such as available resources, without any individual, discretionary assessment of  personal need. Further, Italy had not chosen to include the benefits in an Annex to the Regulation, so as exclude them from being relevant benefits included for the purposes of co-ordinating the social security systems of EU states. Finally, in the view of the Court, it made no difference that one purpose of childbirth allowance to encourage Italians to breed.

Once the childcare allowance and maternity allowance were judged to be social security benefits for the purpose of the co-ordination of social security by Regulation 883/2004, they fell within the scope of the equal treatment provisions of the Single Permit Directive (Article 12). The Court held that, as the third-country nationals in the case were covered by that Directive, they could invoke its equal treatment protection to contend that their exclusion from the Italian childbirth allowance and maternity allowance was unlawful. In so deciding, the Court noted that Italy had not invoked the provision of Article 12  of the Single Permit Directive that would have allowed it to exclude specified classes  of third-country nationals from equal treatment protection.

In the result, the equal treatment provisions of the Single Permit Directive, precluded the Italian legislation that excluded the third-country nationals in question from entitlement to a childbirth allowance and a maternity allowance as provided for by that legislation.

Lessons for the United Kingdom

Many people, both EU citizens and third-country nationals, move into EU states to lawfully reside and work there. When they do so, the ordinary incidences and risks of life occur (babies, illness, accident, unemployment, old age, etc.).  Each country’s parliament determines its own policy on social insurance to protect against such incidences and risks for those who work within it and who pay social insurance contributions.  That is right on democratic grounds as tax and spend decisions are being made and so legislative accountability to those taxed is important.

But in order to cater for movement into and among EU states by those migrating and working, there is an EU Regulation to co-ordinate the social security systems of each country so that people are not penalised for migrating lawfully to work. That law has a democratic stamp.

As regards third-country nationals lawfully residing and working within a state, the Single Permit Directive extends that protection to them by ensuring that they receive equal treatment as compared to citizen of the host state. That law also has a democratic stamp.

The provision of social security is decided democratically at national level; the co-ordination of that provision is provided for by laws made democratically within the EU legal order. The scope of the social rights in question is not determined by the Charter of Fundamental Rights (CFR) (as a catalogue of superior human rights) but by principled legislation made by national parliaments. Further, the beneficiaries of those social rights are the citizens of those countries and other lawful third-country national residents who lawfully work and who pay taxes and social insurance. There are no downsides to full participation in such arrangements. Further, that such arrangements that are made under (national and EU) laws and have a democratic stamp by virtue of being shaped and elaborated by parliaments, means that they have an advantage not found in similar arrangements made by way of international treaty.

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