Digital social security: EU Commission proposes improvements for Europeans to live, work and travel abroad

What are the concrete benefits of digitalisation of social security coordination?

For citizens

Citizens travelling, residing or working in another EU country often need to rely on physical paper or plastic documents to prove their social security rights, such as for healthcare, family benefits and pensions. The Commission’s initiative aims to enable the electronic verification of citizens’  digitalised social security documents which they can easily store and access, for instance on their smartphone. This digital approach will enable citizens to securely prove their entitlements within the EU countries, making access to social security services across borders quicker and simpler. It will not replace paper-based certificates but offer a more convenient and secure alternative for citizens who wish to do so.

For workers

Workers sent by their employer to another EU country need to provide proof that they are covered by the social security system of the country where they usually work. The Commission’sCommunicationsets out actions which, once implemented, will enable verification of workers’ social security coverage through a digitalwallet, for instance on their smartphone, offering an easily accessible digital alternative to printed documents, which can be lost or are prone to falsification. This will also improve the protection of workers and ensure fair labour mobility, by allowing swift and correct verification of workers’ rights abroad.

For businesses

The actions outlined in the Commission’sCommunicationaim to reduce burdensome procedures for businesses, including small and medium-sized businesses (SMEs), for instance, when sending employees to another EU country for work. Both the request and the delivery of the necessary social security documents will be fully digitalised and become more user-friendly and efficient. This will remove administrative costs and hurdles in the process for businesses that need those documents to carry out business abroad. Furthermore, this encourages cross-border mobility, ultimately stimulating sustainable growth and improving competitiveness.

For public administrations

Public administrations in all EU countries already benefit from electronic exchange of social security information, making these exchanges more efficient, reliable and improving the quality of public service. In its Communication, the Commission calls for a sustained investment and commitment by all countries to boost digitalisation further, including interactions with citizens and businesses. This will further simplify procedures and facilitate the implementation and enforcement of social security rules. For example, a labour inspector would be able to verify immediately whether a worker is covered by the social security system of the sending country by checking the digital reference documents, instead of needing to contact the authorities that issued the document.

What measures are already in place to help digitalise social security systems?

Today’s proposal builds on several EU initiatives, which provide a foundation for further digitalisation in the area of social security coordination. These measures include:

• The Electronic Exchange of Social Security Information (EESSI) system, which has successfully digitalised the exchange of social security information among social security institutions in all participating countries. Countries need to finalise their implementation by the end of 2024.
• The Single Digital Gateway Regulation requires Member States to ensure that EU citizens and businesses can access and complete key administrative procedures, including the European Health Insurance Card and the overview of decisions on pension claims from various countries, fully online by 12 December 2023.
• As part of the European Pillar of Social Rights Action Plan, the European Social Security Pass (ESSPASS) pilot project aims to facilitate the interaction between citizens who are moving across the EU, and national authorities. The aim is to improve the way EU citizens can exercise their social security rights when moving, and to explore digital solutions for issuing and verifying people’s social security entitlements in other European countries participating in social security coordination.

What are some examples of how ESSPASS can help people who travel, live, or work abroad?

Healthcare

Thanks to EU rules, if you are temporarily abroad and you need necessary healthcare, you will be treated under the same conditions and costs as locals. The doctor will ask you to show your European Health Insurance Card (EHIC). National administrations will then take care of the reimbursement. However, it may happen that you forget or lose your card. Some problems may also occur given that the hospital cannot verify the validity of the EHIC (e.g. in case of doubts, further exchanges may be needed between relevant institutions of the Member States).

Consider this fictional example:

• Before going on holiday to Spain, Marija should request the digital EHIC from her health insurance institution in Slovenia. To do that, she visits the Your Europe website (i.e. the Single Digital Gateway), which redirects her to the website of her institution.
• The institution issues the digital EHIC.
• Marija easily stores the EHIC in her digital wallet (i.e. future EU digital identity wallet). She does not have to carry a plastic card anymore.
• While on holiday, if Marija needs a medical treatment, she will present the EHIC in the hospital to prove that she is covered in Slovenia.
• Through ESSPASS, the hospital can verify in real-time that the EHIC is valid (i.e. it was issued by a competent institution and has not expired yet). This allows people to have increased confidence in the use of the EHIC and reduce the risk of refusal by the healthcare provider.

Posting of workers

According to EU rules, if you have a company and want to send an employee to work temporarily abroad (i.e. posted worker), you need to request an attestation of the social security legislation applicable to the employee/posted worker (i.e. theportable document A1). In the receiving country, the posted worker may be asked by an inspector to show this attestation. In some cases, the inspector may have doubts on the validity of the document and further exchanges may be needed between authorities.

Consider this fictional example:

• Yiannis has a company in Greece and wants to send his employee, Georgios, to work temporarily in Italy. Yiannis requests the digital portable document A1 from the competent Greek institution. He visits the Your Europe website, which redirects him to the national website of the institution.
• The national social security institution verifies the request and, if the conditions are met, issues the digital document which is made available to Yiannis and Georgios.
• Georgios easily stores the document in his digital wallet (i.e. future EU digital identity wallet).
• The Greek social security institution in parallel informs the Italian institution about the posting via EESSI.
• An Italian labour inspector, Nicola, requests Georgios to present the portable document A1.
• Using ESSPASS, Nicola performs a real-time verification of the document. This allows Nicola to verify the validity of the document, increasing trust.

How is this initiative related to other EU initiatives as part of the digital transition?

The digitalisation in social security coordination initiative aligns with the objectives of Europe’s digital decade. As per the Digital Decade Policy Programme, all key public services should be accessible online by 2030.

The initiative builds upon existing systems and tools. For instance, the Your Europe website will serve as a single-entry point for EU citizens and businesses to request digitalised social security documents under the Single Digital Gateway Regulation and to complete all relevant administrative procedures in this respect.

Once implemented, the European Digital Identity framework and the standardised EU digital wallets will be used to identify EU citizens, as well as to store and share their digital social security documents in a digital wallet. These digital wallets may also accommodate other entitlement documents like the European Disability Card, once the digital format has been developed.

How can the EU support Member States in digitalising social security systems?

The EU supports digitalisation of social security coordination by:

• Setting an EUlegal framework to promote the digitalisation of public services, including social security coordination, for instance through the Single Digital Gateway Regulation.
• Offering technical assistance and support. For example, the Commission helps Member States fully implement the EESSI and accompanies them with technical advice in taking the necessary steps for its continuous improvement. Member States can also benefit from support under the Technical Support Instrument.
• Making available EU funding, for instance through the Digital Europe Programme, InvestEU, the European Regional Development Fund, and the European Social Fund Plus. Digitalising public services and modernising public administration processes feature in all national Recovery and Resilience Plans, which must allocate at least 20% of their total resources to digital objectives.
• Exchanging best practice on national tools and solutions. The European Labour Authority (ELA) is well-placed to create a community of practice encouraging regular sharing of experiences between national administrations. The Communication asks ELA to facilitate regular exchanges between national authorities and to analyse the various national digital solutions to better target investment and support those lagging behind.

For More Information

Press release: digitalisation in social security coordination

Communication on digitalisation in social security coordination: facilitating free movement in the Single Market

Digitalisation in social security coordination

Remarks by Executive Vice-President Dombrovskis:

Let me begin by referring to the principle of the free movement: all EU nationals have the right to travel, work and live in another EU country.

These are some of the EU’s great benefits for people in their daily lives. They are some of the keys to our economic prosperity and the strength of our single market.

They date from the earliest days of European integration.

And they go hand in hand with common rules on social security coordination.

It is thanks to these rules that people continue to receive benefits – such as for unemployment, healthcare, pensions – when they travel or move to another EU country.

Let’s take the European Health Insurance Card as an example.

It comes free of charge.

Around 235 million people hold one to help them get medical support when they are temporarily abroad.

The card allows you to be treated under the same conditions and costs as local nationals.

Unfortunately, accessing social security benefits in another EU country does not always work so smoothly or seamlessly.

There are interoperability issues between different social security systems that make it difficult for national authorities to access and share data.

In turn, this brings more costs for issuing and verifying people’s entitlement documents.

Just to note, each year there are 3.6 million requests for proof of social security coverage in cross-border situations.

It takes more time, because these procedures often rely on physical presence and paper documents.

And it means a lot of paperwork and hassle for millions of European citizens and businesses.

Today, we are proposing to work together with Member States to end all this – and to go digital.

Digitalisation is the key for making the EU’s national social security systems more automated, interoperable and integrated.

So what does the Commission propose in today’s communication?

As part of the EU’s drive to embrace digitalisation, we can build on several existing EU initiatives that support the development of cross-border digital public services so that people get fast access to eligible benefits.

This includes the Single Digital Gateway, which requires that people and businesses have full online access to key administrative procedures by the end of this year.

Then, to make handling of cross-border social security cases between institutions more efficient, we want Member States to speed up implementation of the Electronic Exchange of Social Security Information System.

This system replaces paper-based exchanges between national social security institutions.

It should be fully operational across Europe by the end of 2024.

We want to move forward with introducing the EU digital wallet to allow EU nationals to carry digital versions of their social security entitlement documents – again, such as the European Health Insurance Card.

This will make it easier for social security institutions, labour inspectorates and healthcare providers to verify them instantly.

Various EU funding instruments for digitalisation are available – such as the Digital Europe Programme, InvestEU, European Regional Development Fund and European Social Fund Plus.

Nicolas will give you more detail but just to conclude, digitalising the coordination of national social security systems will benefit both people and businesses across Europe.

It will make it easier for people to move around the EU to travel, live, work or study in other Member States.

It will help to reduce errors, prevent fraud and simplify procedures for businesses providing services abroad.

In short: removing barriers and red tape, providing a seamless digital experience.

Ultimately, digitalising this sector will stimulate sustainable growth and help to improve the EU’s competitiveness.

Thank you – and with that, I pass over to Nicolas.

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Remarks by Commissioner Schmit 

This year is the 30th anniversary of the Single Market. This is also about free movement of people.

There is no free movement of people without guaranteeing their social rights, and that’s why coordination of social security across borders is so important.

As part of the right to free movement, you can access your normal social benefits even when you are abroad, be it your pension, child benefit or healthcare.

To give you some figures.

In 2021, around 16 million citizens lived in another EU or EFTA country.

There were 9 million claims for cross-border healthcare.

6 million pensions were disbursed to pensioners residing in another Member State.

And 3.6 million people obtained the document to be posted abroad for work.

This can mean a lot of paperwork, which often becomes time-consuming, and leads to delays in receiving your benefits.

Today’s Communication aims to encourage Member States to keep making the procedures simpler, faster, more accurate and more secure by making them as digital as possible.

The first action relates to the Electronic Exchange of Social Security Information, a system links the different social security institutions across Europe and helps them exchange information electronically.

The electronic system also helps clamp down on the number of cases of fraud or errors.

All EU countries as well as 5 others [Iceland, Liechtenstein, Norway, Switzerland and the UK] already use this system, but many of the countries have not fully implemented it, for example when it comes to reimbursing healthcare costs.

This means that all the countries that have the full system up and running have to maintain paper-based systems in parallel.

If one country is not fully operational, the whole system does not function at its optimum.

So one of the actions we call for in the Communication is for all countries to fully implement this system by the end of next year.

Another action relates to the European Social Security Pass pilot (the so-called “ESSPASS”). This system aims to digitally verify and issue citizens’ social security entitlements across borders, such as the E-HIC card to get healthcare abroad, or the PD A1 document needed for posted workers.

The ESSPASS would help people travelling or moving to another EU country – and companies doing business abroad – to interact digitally with social security institutions and other public bodies, like labour inspectorates and healthcare providers. Currently 12 Member States are taking part.

So in the Communication, we call on all the Member States to join the pilot so everyone is at the same level.

The Commission will then analyse the results and make a study, and see whether a legislative framework would be needed in the future.

There is also the Single Digital Gateway Regulation, which requires Member States to ensure that citizens and businesses can complete 21 administrative procedures fully online by December 2023. Three of these procedures relate to social security.

The Communication invites Member States to deliver additional portable documents (in the fields of sickness, accidents at work,   family and unemployment benefits) fully online by 2025.

We also want Member States to start working towards introducing EU Digital Identity wallets, which would allow EU citizens to carry digital versions of their entitlement documents, alongside all their other digital services.

If Member States take forward these actions:

Citizens’ interactions with national authorities would be simplified, and they would get quicker access to their eligible social benefits from abroad such as pensions or healthcare, with digital versions of their entitlement documents available on their smartphone.

This is good for those already moving around Europe, and it could also encourage more mobility;

It would have a huge cost- and time-saving effect on companies doing business cross-border  as they could request and receive the necessary social security documents in a digitalised form; and

It would allow national administrations to coordinate social security across borders more effectively. For example, labour inspectorates would be able to verify immediately whether a worker is covered by the social security system of the sending country by checking the digital reference documents, instead of needing to contact the authorities that issued the document.

We also count on the European Labour Authority to help national administrations share best practices.

Thank you very much.

Source – EU Commission