Department of Social Protection. An Roinn Coimirce Sóisialaí. Social Policy Developments in the EU

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1 Department of Social Protection An Roinn Coimirce Sóisialaí Social Policy Developments in the EU 1 January 30 th June 2012 Report to the Oireachtas

2 1. Introduction This Report is submitted in accordance with the requirements of Section 2(5) of the European Union (Scrutiny) Act The report sets out the principal developments in the policy areas which fall within the responsibility of the Department of Social Protection It also includes a summary of the legislative and other proposals on which information notes were submitted to the Oireachtas Joint Committee on European Affairs under the European Union (Scrutiny) Act 2002 during the relevant period. 2. Employment, Social Policy, Health and Consumer Affairs Councils During Denmark s Presidency of the Council of the European Union, the Employment, Social Policy, Health and Consumers Affairs Council held formal meetings in Brussels on 15 th February and in Luxembourg on 21 st June. An informal Employment and Social Policy Council meeting was held on 24 th and 25 th of April, in Horsens, Denmark. As the work of the Council formation involves other Departments (i.e. Departments of Jobs Enterprise, and Innovation; Justice and Equality; Community, Equality and Gaeltacht Affairs; Health; and Children and Youth Affairs), those Departments will report on the issues relevant to their areas of responsibility. 3. Informal Meeting of the Employment and Social Policy Ministers 24 th and 25 th April 2012 An informal meeting of Ministers was held in Horsens, Denmark from the 24 th and 25 th April The topic of Youth Unemployment was among the main priorities of the Danish Presidency. In line with this, three workshops were held at which the topics Ways to fulfil the youth guarantee, Social Services under pressure, and Linking youth policies on employment, education and training, were discussed. The Employment Package of the Commission was also presented at the informal meeting. 4. Formal Council 15 th February 2012 The main issues discussed were as follows ; Priorities for action in the areas of employment and social policies Draft council conclusions regarding the Annual Growth Survey and the Joint Employment Report in the context of the European Semester were adopted by the Council. This report set out areas for priority action for Member States under the National Reform Programmes: Making it easier for employers to hire people Removing barriers to employment

3 Tackling high youth unemployment Reducing long term unemployment Tackling increasing poverty and social exclusion Focus on skills and investment in education/training Reforming social protection systems. Ireland fully endorsed the Council Conclusions agreed at the meeting. The social impact of the economic crisis and ongoing fiscal consolidation: Third Report of the Social Protection Committee (2011) The Council was asked to note the main messages in the report of the Social Protection Committee (SPC). This exercise of the SPC was undertaken in order that it could fulfil its role in the governance and implementation of the social dimension of the Strategy, and to meet its Treaty-based mandate to monitor the social situation and the development of social protection systems. It examined the major trends in the social situation and policy measures Member States have put in place in the past year to tackle the economic situation and its social implications. The SPC agreed the main messages emanating from the analysis: The resilience of social protection systems must be improved to enable them to continue providing protection to the entire population. Mitigating income support at an adequate level is effective in offsetting the worst effects of the crisis and in spurring aggregated demand. Fighting unemployment is undermined by low job creation and insufficient implementation of active inclusion measures. Mitigating inequalities is crucial to ensure a fair distributional impact of austerity programmes and to restore confidence in inclusive growth. Overall effects of changes in the financing of social protection need very careful analysis. Ireland supported the adoption of these messages and had already agreed its position through its participation at the SPC. 5. Formal Council 21 st June 2012 The EPSCO Council met on Thursday 21st June in Luxembourg. The key items discussed, from an Irish Social Security perspective, are set out below. Employment Performance Monitor The Council endorsed the employment performance monitor prepared by the EMCO, which identifies the main employment challenges for the EU and each Member State.

4 Employment Package There was an initial debate on the employment package which was first presented to the Council at the Informal meeting in April. Its main objectives were to put forward a set of actions for Member States which would enable job creation, increase mobility and higher qualifications and to identify areas for potential job growth e.g. green economy and ICT. The discussion was focussed on a number of key areas including : Youth unemployment and better access to the labour market Labour market segmentation Improvement of the employment rate for disadvantaged groups Role of the social partners Education and training Green economy Pensions adequacy: Report from the Social Protection Committee The Council endorsed the main messages of the 2012 report on pension adequacy which was prepared jointly by the Commission and the SPC The main messages from the report are: There is no single solution for all on pensions systems Challenges have increased significantly as a result of the economic crisis Better Adequacy outcomes are largely contingent on changes in people s retirement and long-term savings behaviour. Adequacy may also be successfully strengthened with additional contributions to pension schemes. Member States are opening routes for people to improve their pension entitlements by working longer and retiring later Promote longer and healthier working lives through employment and industrial relations policies. MS public pension schemes are used to help secure social goals such as protection against poverty Achieving the poverty target will very much depend on the extent to which pension systems will continue to help prevent poverty for older people. An important part of the adequacy challenge is gender specific A full assessment of the adequacy of pensions will require taking into account the access to free or subsidised services Collaboration between the SPC and the EPC on developing better aligned indicators and methodologies should be intensified Ireland fully participated in the AdHoc Group and agreed the Report and key messages.

5 Responding to Demographic Challenges through enhanced participation in the labour market and society by all The Council was invited to adopt the Council Conclusions which bring together all of the elements that need to be addressed to deal with demographic challenges through increasing the size of the labour force. These elements include increased workforce participation of women, people with disabilities and young people. Longer working lives, lifelong learning and better child care are also measures which can make a contribution in this area. The Council adopted these Conclusions These conclusions are not contentious and were supported by Ireland. 6. Amendments to Regulations 883/2004 and 987/2009 on the coordination of social security systems Regulation 465/2012 which amends the social security coordination regulations took effect from the 28 th June This regulation introduced two substantive amendments as well as a number of technical changes to the coordinating system. The main change relates to the social security system to be applied to air-crew. Under previous provisions air-crew were subject to the legislation of their State of residence, or the State where the registered office of the company employing them is located. Changes introduced by Regulation 465/2012 mean that such staff will now be insured in the country in which they are based. The other significant change makes provision for unemployment benefits for self-employed frontier workers where they have been covered for benefits in the country in which they work but no schemes exists in the country of residence. 7. Information Notes Submitted to the Oireachtas Association Agreements with Albania, Montenegro and San Marino on the coordination of social security systems On the 30 th March 2012 the European Commission published proposals on the position to be taken on behalf of the European Union with regard to the provisions relating to social security coordination contained in Association agreements with Albania, Montenegro and San Marino.. The main provisions provide for equality of treatment in relation to social security for nationals of these States, export of pension payments and aggregation of social security contributions where the person has worked in more than one EU State. The requirements are already covered by domestic legislation and existing EU Regulations and, accordingly, they have no implications for Ireland.

6 The legal base for these measures is Article 79 (2) of the TFEU which allows Ireland the option, under Protocol 21, to opt in or out of participation. The intention is to opt in as soon as possible Association Agreement with Turkey on the coordination of social security systems Also on the 30 th March 2012 the European Commission published a similar proposal dealing with an Association agreement with Turkey. As with the other agreements mentioned above, Ireland is satisfied to accept the practical provisions of the proposed decision because domestic legislation and EU regulations already cover the main requirements. However, there are serious issues for Ireland in relation to the choice of legal base. Because an objective of the agreement is free movement for Turkish citizens within the EU the legal base chosen in this case is Article 218(9) and Article 48 of the TFEU. Our position is that this is not the correct legal base, as in our view, Art 48 deals with the rights of EU citizens and not third country nationals. More importantly, the use of Article 48 deprives Ireland of its rights under Protocol 21 to opt in or out of the proposal. A similar issue has arisen in relation to Swiss and EEA agreements and this has been referred to the CJEU to adjudicate on. 8. Looking Forward Aims of the of the incoming Cypriot Presidency in the social policy area Cyprus will take over the Presidency on 1 July 2012, the last of the current Trio. The overall theme of the Trio is Tackling Europe s Demographic Problem. The main priorities for the Cypriot Presidency will be: 1. Europe, more efficient and sustainable 2. Europe, with a better performing and growth economy 3. Europe, more relevant to its citizens, with solidarity and social cohesion 4. Europe in the world, closer to its neighbours During its Presidency, Cyprus aims to work Towards a Better Europe by supporting actions that promote growth, jobs and improving confidence in the Euro. It will continue the work of the Europe 2020 Strategy and the Compact for Growth and Jobs, which was decided in June. RELEVANT INFORMATION SOURCES 1. Denmark Presidency Website 2. Cyprus Presidency Website

7 3. Social Protection Committee