Right to Social Security in Europe

Matti Mikkola, Professor, University of Helsinki Colchester 28.4.2004

A. General background

Concept of Social security (figure 1) a) Relation to Private Insurance 1) Based on solidarity, horizontal and vertical (not only on distribution of risks) 2) Compulsory (instead of being voluntary) b) Relation to Social Assistance 1. Contributory (not taxation based) 2. Objective criteria in law (not means tested) 3. Problem: Nature of mixed benefits (such as: home care allowance, support for single parents or students as well as housing benefit): non-contributory but based on objective criteria (figure 2)

Key historical programmes, two approaches 1. Programme of Bismarck (Declaration of 1881): Workers insured in respect of (4) social risks 2. Beveridge Plan (Report of 1942): National health service, child allowance and pension schemes for all (citizens)

Economic and political background (figure 3) 1. European Community; Treaty of Rome (articles 48, 49) and Co-ordination regulation 1408/71: work related benefits 2. EFTA (United Kingdom, Scandinavia and Portugal); No common rules, coordination rules only in Scandinavia, but similar models: universal benefits for citizens and work-related cash benefits as additional protection 3. Soviet bloc; Framework laws of the Union of Soviet Socialist Republics: (work- related but in a situation of formal full employment) universal cash benefits for all and additional increase based on length of service and level of wage

Legal sources 1. International legal instruments (human rights) 2. EU draft constitutional treaty and national constitutions (basic rights) 3. National laws: constitutions, other legislation, collective agreements, case law 4. Coordination rules (1408/71, Art. 12§4 of the European Social Charter) B. Human rights, basic rights

International legal instruments 1. ILO - Convention 102 (1951): 3 of 9 risks, UN Covenant on ESC-rights (1966) 2. Council of Europe - European Code of Social Security (1964): 6 of 9 risks - Protocol to the Code (1964): higher levels, wider scope of persons - Revised Code (1990): still higher standards, flexibility (not yet in force) 3. Human rights instruments of Europe - European Social Charter (the ESC of 1961) and Revised ESC (RESC of 1996) article 12: reference to ILO Convention 102 (ESC) and to the European Code of Social Security (RESC); supervisory body: European Committee of Social Rights - European Convention of Human Rights (the ECHR) Additional Protocol nr 1, article 1: Protection of saved contributions; supervised by the Court of Human Rights

Draft EU Constitutional Treaty 1. Article II-34: Social security is recognised as fundamental right - agreed at the EU summit in Nice but not fully accepted by UK and Scandinavian countries 2. Articles III-103-107: Social policy: no harmonized schemes of social security in the absence of unanimity; the function of EU might consist of policy making, promoting good practises and defining common minimum standards 3. Article II-53: Direct reference to the ECHR and indirect reference to the ESC 4. Article II-52§4: Restriction of competence of the EU bodies

Tendencies a) In the near past 1. During the integration the work-related way of thinking was dominant, promoted by the EU Commission and the European Court of Justice (ECJ) 2. Under the transition many international donors were advising the Eastern and Central European Countries to adopt means tested basic and private schemes instead of universal and public b) Contemporary tendencies 1. In the national laws almost all countries have widened the schemes to cover all citizens on health and maternity services, family benefits and income for the elderly. The draft EU constitution II-34§2 widens the scope of persons to cover in principle the whole population in EU as well (lawful residence and staying as legal criteria) 2. Pension models are based on three pillars (figure 4) 3. Many countries give more space than earlier to private schemes decrease solidarity

C. Content of the European Social Charter

Case law of the European Committee of Social Rights (ECSR) a) Article 12§1 (adequate system) 1. The social security system must offer benefits in principle in all the nine branches 2. The system must cover a significant percentage of the population; health care and maternity services as well as child allowances and guaranteed income for the elderly should cover the whole population 3. The system must be based on the principle of collective funding and managed under the supervision of the public authorities, with the state as ultimate guarantor of contributions 4. Minimum level of benefits: - For adult persons: 50% of the median equalized income - Child allowance: means tested or flat rate, 4-8 % of the median income 5. Respect of non-discrimination clause (ethnic and other minorities) b) Article 12§3 (progressive development) 6. States must take constant efforts to improve the system in terms of material and personal scope and level of protection afforded. 7. States must ensure that the changes to the social security systems do not unduly restrict the scope and level of social security provision, 8. Restrictions are acceptable if they aim at attaining an improved sustainability of the social security system, not discriminating against any group of people and always affording protection above the level of last resort social assistance See http://www.coe.int/T/E/Human Rights/Esc/Conclusions XVI-1, Introduction and country by country analyses in Conclusions XVII-1)

Issues for further discussion

1. Minimum replacement rate (in relation to previous earnings): (40,50 or 60 per cent) This question is currently under consideration in ECSR 2. Adequacy of unemployment benefits: conditions (work history, suitability of offers and willingness to work, training, activation measures, mobility etc.), maximum waiting times and minimum duration of the benefit period as well as the minimum level of the benefit