1. SFB International Tax Coordination 10/21/2005, Timo Fischer Europeanization of Long-Term Care – An economic approach to European Social Security Law – European Conference on Long-Term Care Mannheim, 21/22 October 2005

2. SFB International Tax Coordination 10/21/2005, Timo Fischer 2 Structure 1. The Community‘s Provisions on Coordinating Social Security 2. The Provision of LTC in the U.K. and in Germany 3. Case Studies 4. Conlusio

3. SFB International Tax Coordination 10/21/2005, Timo Fischer The Community‘s Provisions on Coordinating Social Security

4. SFB International Tax Coordination 10/21/2005, Timo Fischer 4 Why is Coordination Necessary? Territoriality principle + free movement „Coordination rules are rules of international social security law intended to adjust social security schemes in relation to each other, for the purpose of regulating transnational questions, with the objective of protecting the social security position of migrant workers.“ calls for

5. SFB International Tax Coordination 10/21/2005, Timo Fischer 5 Basic Coordination Principles 1. Equal treatment 2. Determination of the applicable legislation – lex loci laboris 3. Maintenance of aquired rights – or: aggregation 4. The export of benefits

6. SFB International Tax Coordination 10/21/2005, Timo Fischer 6 The European Provisions Coordination as an annex to free movement of labour Art. 42 EC: „The Council shall … adopt such measures in the field of social security as are necessary to provide freedom of movement for workers…“ Reg. 1408/71 resp. Reg. 883/2004

7. SFB International Tax Coordination 10/21/2005, Timo Fischer 7 The Coordination of Long-Term Care LTC not explicitely within the material scope ECJ: Molenaar (1996) & Jauch (2001) Qualification as sickness benefits which fall under Reg. 1408/71 and Reg. 883/2004

8. SFB International Tax Coordination 10/21/2005, Timo Fischer The Provision of LTC in the U.K. and in Germany

9. SFB International Tax Coordination 10/21/2005, Timo Fischer 9 German Perspektive English Perspective organising framework Social Dependency Insurance insurance-based, mandatory (~ 90% of the population): Social Dependency Insurance public welfare covering almost every individual living in England benefits in kind (trigger criteria) universal („in need of long- term care”) selective (financial assessment + in need for help) cash benefits (trigger criteria) universal („in need of long-term care”) Pflegegeld universal („in need for help“) Attendance Allowance financingcontribution-basedtax-financed LTC in Germany and the U.K.

10. SFB International Tax Coordination 10/21/2005, Timo Fischer 10 Exportability of cash benefits England Attendance Allowance special non-contributory benefit  exception to the principle of exportability  Germany Pflegegeld subject to the principle of exportability cash-benefits from other Member States may be deduced  Cash benefits are paid by the competent institution

11. SFB International Tax Coordination 10/21/2005, Timo Fischer 11 Exportability of benefits in kind England subject to the principle of exportability Germany subject to the principle of exportability   Services are provided on behalf of the competent institution by the institution of the country of residence

12. SFB International Tax Coordination 10/21/2005, Timo Fischer Case Studies LTC Benefits in Kind LTC Cash Benefits

13. SFB International Tax Coordination 10/21/2005, Timo Fischer 13 A few assumptions… n The model care client… l is a senior citizen aged 65 or over and in need of long-term care. l does not integrate into the social protection schemes of the receiving Member State (competent state ≠ state of residence). n The current European co-ordination scheme is applied. n Neither financing, quality, nor take-up of benefits (etc) are taken into consideration. n The object of investigation is solely the legal provision of long-term care (no private out-of-pocket payments!)

14. SFB International Tax Coordination 10/21/2005, Timo Fischer 14 Cash-Benefits: England  Germany disability levelEnglish benefit (Pflegegeld) expected cash benefit the immigrant will receive in Germany difference to the situation in England low (Pflege- stufe 1) 225.90 EUR205 EUR-20.90 EUR medium (Pflege- stufe 2) 225.90 EUR410 EUR+184.10 EUR severe (Pflege- stufe 3) 337.50 EUR665 EUR+327.50 EUR

15. SFB International Tax Coordination 10/21/2005, Timo Fischer 15 Cash-Benefits: Germany  England disability levelGerman benefit (Pflegegeld) expected cash benefit the immigrant will receive in England difference to the situation in Germany low (Pflege- stufe 1) 205 EUR225.90 EUR+20.90 EUR medium (Pflege- stufe 2) 410 EUR nil severe (Pflege- stufe 3) 665 EUR nil

16. SFB International Tax Coordination 10/21/2005, Timo Fischer 16 Benefits in kind: England  Germany capital assetsGermany: remaining monthly income England: remaining monthly income including mandatory allowance financial betterment 0-18,000 EUR1,154.10 EUR765.78 EUR+388.32 EUR 18,000-29,250 EUR e.g. 27,000 EUR 1,154.10 EUR765.78 EUR minus a tariff on capital assets 144 EUR remaining income 621.78 EUR +532.32 EUR more than 29,250 EUR 1,154.10 EUR765.78 EUR minus service charge 600 EUR remaining income 165.78 EUR +988.32 EUR

17. SFB International Tax Coordination 10/21/2005, Timo Fischer 17 Benefits in kind: Germany  England capital assetsGermany: remaining monthly income England: remaining monthly income including mandatory allowance financial loss suffered 0-18,000 EUR1,154.10 EUR765.78 EUR -388.32 EUR 18,000-29,250 EUR e.g. 27,000 EUR 1,154.10 EUR (770 GBP) 765.78 EUR minus a tariff on capital assets of 144 EUR remaining income 621.78 EUR -532.32 EUR more than 29,250 EUR 1,154.10 EUR765.78 EUR minus the service charge 600 EUR remaining income 165.78 EUR -988,32 EUR

18. SFB International Tax Coordination 10/21/2005, Timo Fischer 18 Conclusio n For a migrating individual the current EU policy on coordination social security may not always provide satisfactory results. n Is there need for measures or should the results of the case studies be seen as a singular phenomena? Thank you!