To solve Brexit benefits puzzle, lawmakers study simplicity in Greenland’s split
16 February 2017. By Matthew Holehouse.
Lawmakers puzzling over how to untangle the UK from the EU's mass of cross-border agreements on state benefits are seeking inspiration from the rules governing Greenland's economic break with Europe 35 years ago.
A two-line clause that guaranteed reciprocal acquired social security rights for Greenlanders and Europeans could hold the key to handling one of the most sensitive issues of the Brexit negotiations, European Parliament lawmakers have suggested.
Both the UK and EU want an early agreement securing the rights of around three million people already living outside their home country when new migration rules are brought in after Britain leaves the bloc.
Hammering out an agreement on this will take priority over talks on future trade arrangements, but it is a hugely complex issue.
Many British lawmakers suggest the issue is merely one of guaranteeing people's immigration status. But in reality it involves a thicket of politically contentious EU legislation governing the rights and entitlements of cross-border workers, students and retirees to state benefits.
Leaders must address not only whether it is possible to preserve the current entitlements of their citizens living abroad, but also their rights to make new claims in the future as their lives change and they move across jurisdictions.
One of the most important pieces of legislation is Regulation 883/2004, on the coordination of social security systems. This governs states' obligations to provide benefits such as sick pay, pensions, unemployment benefits and childhood benefits to residents from other member states.
This was the legislation that former prime minister David Cameron targeted in an arduous and partially successful attempt to renegotiate the UK's terms of membership of the EU early last year.
The regulation is extensive and fiddly: Article 39, for example, determines how member states divide the cost of incapacity benefits if a claimant's condition deteriorates. Article 68 determines who pays if a family is entitled to claim child benefits in two or more states.
Planned new clauses will address the rules around state-funded care for the elderly — a major interest for the UK, which has 400,000 retirees living in other EU states.
Other, separate, pieces of legislation address issues such as the co-ordination of private pension rights across borders, the entitlement to university fees or access to healthcare for tourists.
The European Council's legal service is understood to have drawn up a methodology for resolving the issue, but lawmakers have their own suggestions.
Greenland would seem to offer few lessons for the UK's divorce.
The vast island of fewer than 60,000 people joined the then European Economic Community in 1973 as an autonomous territory of Denmark, but chose to leave in a referendum in 1982.
Negotiations for Greenland's break centered heavily on funding and fishing but took three years to conduct. Under modern EU rules, the UK will have just two years to negotiate its deal.
However, a simple declaration in the legislation adapting social security rules to account for Greenland's exit may serve as a model, says an internal report by the European Parliament's committee on employment and social affairs.
Two paragraphs were inserted intended to protect the rights of Greenlanders who had lived in other EEC countries to social security benefits there and vice versa.
It stated that the new rules "shall not affect any rights acquired or in the process of being acquired during the period in which Greenland belonged to the European Communities" for citizens who worked in Greenland or other member states.
A simple answer?
Similar wording could be included in the necessary amendments to Regulation 883/2004, the committee lawmakers say, in order to protect people already living outside their home state.
"In this fashion, acquired rights or rights in the process of being acquired before the withdrawal of the UK would be safeguarded," it says.
Arrangements for any rights available to UK and EU nationals who move to a new state following Brexit would have to be negotiated during the exit deal, the report says.
This is likely to require transitional measures, and the agreements on long-term benefits such as pensions may be different from short-term payments such as unemployment benefit.
Agreements will have to be reached for areas, such as pension payments, where funds are transferred from one national treasury to another, it notes.
Complete this form to receive emails from MLex with selected highlights from our global coverage of regulatory risk and opportunity, as well as upcoming events, special reports and exclusive interviews.