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European Commissioner responsible for Employment, Social Affairs and Inclusion
Commission publishes guide on application of ‘Habitual Residence Test’ for social security
Statement, press room
Brussels, 13 January 2014
The free movement of people is a cornerstone of the EU's Single Market, and of the European Union as a whole.
It is one of our greatest achievements. Over 14 million EU citizens study, work or retire in another Member State. The right to free movement is one of the aspects of the European Union most cherished by its citizens.
Studies consistently show the benefits of free movement of workers for the economies of host countries. Mobile workers complement host country workers by helping to address skills gaps and labour shortages - in other words they tend not to take jobs away from host country workers.
In the circumstances of the current crisis, when we are witnessing huge disparities between levels of unemployment in different EU countries, probably more people are looking for jobs abroad, especially from countries like Spain or Italy.
The European Commission therefore does all it can to make it easier for people to work in another EU country. We will for example be proposing later this week to improve the functioning of the EURES pan-European job search network.
Mobile workers from other EU countries are more likely to be employed and so are generally net contributors to the welfare systems of their host countries because a greater proportion are of working age compared to host countries' populations.
In other words, mobile workers from other EU countries pay more in tax and social security into host countries' public budgets than they receive in benefits. The more workers from other EU countries a country has, the more solvent its welfare system is.
Nevertheless, it is necessary to have clear safeguards in EU law to prevent people from abusing social welfare systems of other EU countries.
For workers, the rules are relatively simple – if you work in another Member State you are entitled to the same benefits as workers of the host country, as you are also obliged to pay the same taxes and social security contributions.
For people not working, such as pensioners, they qualify for social benefits in the Member State where they are "habitually resident". Determining a person's Member State of "habitual residence" is also important for workers that work in more than one Member State.
EU rules to determine where a person is habitually resident are not new – they exist for many years. But the guide published by the Commission today will make it easier for Member States authorities to apply the ‘Habitual Residence’ safeguards in practice.