Committee Reports::Report No. 17 - Application of Social Insurance Schemes to self-Employed Persons and their Families moving within the Community::28 June, 1978::Report



1. The Joint Committee has examined the proposals made by the Commission in January last [R/30/78 (SOC 2)] for two Council Regulations concerning the

adaptation of Council Regulation (EEC) No. 1408/71 of 14 June, 1971 on the application of social security schemes to employed persons and their families moving within the Community, with a view to applying it to self-employed persons and their families, and

adaptation of the Annexes to Council Regulation (EEC) No. 1408/71.

2. To secure freedom of movement for workers the Council was obliged by Article 51 of the EEC Treaty to adopt measures in the field of social security providing for workers and their families the

(a)aggregation of insurance periods and periods treated as such and

(b)payment of benefit in all of the Community’s territory.

Council Regulations (EEC) Nos. 1408/71 and 574/72 cover these matters. The Treaty does not contain any corresponding provision relating to self-employed persons. The Commission, however, argues that it is now imperative to co-ordinate the social security schemes of the Member States for self-employed persons “because of progress made in implementing freedom of establishment and freedom to provide services, the development of social security systems of the six original Member States, which are increasingly providing social insurance cover for self-employed persons, and the fact that in two of the new Member States self-employed persons are entitled to the same—or almost the same—insurance cover as employed persons.”

3. The Commission wishes the Council to adopt the proposals by the end of this year. The Joint Committee understands that the proposals are under examination by the Council’s Social Questions Group but is informed that it is not possible to say at this stage when the Council is likely to take a decision.

Commission’s Proposals

4. The purpose of the Council Regulations dealing with the social security of migrant workers is to ensure—

(i)that nationals of a Member State working in another Member State will come under social security cover in the same way as nationals of the country of employment;

(ii)that periods of insurance in different Member States may be combined in determining eligibility for social security benefits and

(iii)that social security benefits may be received anywhere within the Community.

Broadly speaking the object of the Commission’s proposals is to extend this system to self-employed persons in so far as they are covered by the national social security systems.

5. Apart from some exceptions, self-employed persons would, under the Commission’s proposals, be covered by the same Community scheme as employed persons as regards

(a)equality of treatment with nationals under the domestic legislation of the Member States;

(b)determination of the legislation applicable;

(c)aggregation of insurance periods for entitlement to benefits provided under sickness and maternity insurance, invalidity insurance, old-age insurance, survivors’ insurance and unemployment insurance, as well as death grants and family benefits;

(d)the provision of benefits in cash and in kind provided under sickness and maternity insurance, insurance against accidents at work, death insurance (death grants), and family benefits, regardless of the Member State where the person concerned or the members of his family are staying or residing;

(e)the export of pensions for invalidity, old age, survivors and accidents at work to the territory of any other Community Member State;

(f)the method of calculating pensions for invalidity, old age and survivors, if the person concerned was subject to the legislation of more than one Member State.

The exceptions referred to concern mainly

(a)some details on the aggregation of insurance periods for entitlement to pensions;

(b)obtaining unemployment benefits outside the competent State.

Also in view of their special nature, certain pension insurance schemes for self-employed persons of some Member States would, at least for the time being, be left outside the scheme.

Implications for Ireland

6. The Commission proposals arc designed to adapt the EEC Regulations dealing with employed persons so as to apply them to self-employed persons and their families moving within the Community. The extent to which this would put self-employed persons in the same position as employed persons in the matter of social security would depend on the scope of the social security provision for self-employed persons in the various Member States. In Ireland self-employed persons are not as yet covered by the social insurance system with the result that the Commission proposals would not have any effect in relation to the normal benefits of that system, viz., sickness and maternity cash benefits, invalidity benefit, old age benefit, survivor’s benefit, occupational injuries benefit, death grant, unemployment benefit. The general scheme of children’s allowances applies to both employed persons and self-employed persons. If, therefore, the Commission proposals are adopted, self-employed persons moving from Ireland to other Member States and those moving from other Member States to Ireland would have their entitlements to children’s allowances schemes preserved.

7. As far as health services are concerned the EEC regulations on social security for migrant workers provide in general that a person insured under our Social Welfare Acts (including a person in receipt of a contributory social welfare pension) and his dependants is entitled, when in another EEC country, to medical attention on the same basis as a worker of that country. Reciprocally, their workers and their dependants are entitled, when in Ireland, to the full range of Irish health services free of charge. The cost of the services is a charge on the social insurance institution of the worker. The Commission’s proposals would extend these arrangements to the self-employed (i.e. in our case, a person who is or has pursued a professional or trade activity not involving a contract of service) who has full or limited eligibility under the Health Act, 1970.

Views of the Joint Committee

8. The EEC Treaty gives the right to self-employed persons who are nationals of a Member State to take up and pursue their activities in another Member State under the conditions laid down by the laws of the latter state for its own nationals. Progress has been made in ensuring that this right can be effectively exercised by the adoption of Community legislation providing for the recognition of qualifications. In the circumstances it seems to the Joint Committee a logical step to co-ordinate the Member States’ social security schemes applicable to the self-employed. Generally speaking the Commission’s proposals for such co-ordination seem reasonable.

9. In all the Member States, except Ireland, social insurance coverage is provided to a greater or lesser degree for self-employed persons. The adoption of the proposed Regulations would not impose an obligation on Ireland to extend our social insurance system to the self-employed. However, this matter is at present under active consideration and no doubt the possible adoption of the proposed Regulations is a factor to be taken into account. Moreover, the gradual extension of social security schemes to those not covered or inadequately covered is contemplated by the Social Action Programme adopted by the Council in 1974 and so presumably concrete Community proposals in this area can be anticipated.

10. It is clear from the Discussion Paper on Social Insurance for the Self-Employed published by the Government (Prl. 6772) that the provision of social insurance for the self-employed in this country raises many complex issues. One view expressed to the Joint Committee was that, because of the erosion of the differentials between social insurance and social assistance benefits, many self-employed persons would see their compulsory inclusion in a social insurance scheme merely as the imposition of a tax. The avoidance of a means test would in this view be attractive to only a limited number. However, the Joint Committee is convinced that there are self-employed persons who need and who would welcome the protection of social insurance. It believes therefore that there should be a scheme but on the whole it would favour one which included provision either for voluntary coverage or contracting out. While recognising that either provision would give rise to the difficulties to which the Discussion Paper draws attention, the Joint Committee considers that some departure from a comprehensive compulsory scheme is necessary to command widespread acceptance.


11. The Joint Committee wishes to acknowledge with thanks the considerable assistance it received in examining the Commission’s proposals from the Federated Union of Employers and Mr. Brendan Dowling, Economic and Social Research Institute.

(Signed) EOIN RYAN,

Vice-Chairman of the Joint Committee.

28th June, 1978.