Date: 2023-07-14Category: Not ApplicableState: Union GovernmentCountry: Europe
Decision No 2/2023 of the Specialised Committee on Social Security Coordination established by Article 8(1)(p) of the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, of 28 June 2023 as regards the designation of the financial institution to serve as reference to determine the interest rate for late payments and the exchange rate for currency conversions, as well as the date to be taken into consideration for determining the rates of currency conversion [2023/1460]
Executive Summary:
This decision, adopted by the Specialised Committee on Social Security Coordination on June 28, 2023, designates the European Central Bank (ECB) as the financial institution for determining interest rates for late payments and exchange rates for currency conversions under the Trade and Cooperation Agreement. It also establishes the specific dates to be used for determining these exchange rates, aiming to streamline processes and avoid complications for social security institutions. The decision entered into force on the date of its adoption.
Key Points / Main Content:
Financial Institution Designation:
* The European Central Bank (ECB) is designated as the financial institution for determining interest rates for late payments (Article SSCI.532) and exchange rates for currency conversions (Article SSCI.73).
Exchange Rate Definition:
* The rate of conversion is defined as the daily conversion rate published by the European Central Bank.
General Rule for Conversion Rate:
* Unless otherwise stated, the conversion rate used shall be the rate published on the day the operation is performed.
Specific Rules for Benefit Establishment and Calculation:
* For initial benefit calculation, if amounts from a prior period are considered, the conversion rate is from the last day of that period.
* If a single amount is considered for benefit calculation, the conversion rate is from the first day of the month immediately preceding the month when the provision must be applied.
Benefit Recalculation:
* When recalculating benefits due to factual or legal changes, the rules for initial benefit calculation apply.
Indexed Benefits:
* For regularly indexed benefits impacted by amounts in other currencies, the conversion rate is from the first day of the month preceding the month when indexation is due, unless national legislation states otherwise.
Offsetting and Recovery:
* For offsetting from arrears/ongoing payments, the exchange rate date is the working day immediately preceding the day the final request for offsetting was sent.
* For recovery requests, the exchange rate date is the working day immediately preceding the day the first request for recovery was sent.
* A working day is defined as a day the ECB publishes a daily reference rate for currency exchange.
Impact Analysis:
Social Security Institutions:
Impact: Social security institutions are directly affected as they must use the ECB as the reference for interest and exchange rates, and adhere to the specified dates for currency conversion.
Action Required: Institutions must implement the ECB's rates and dates as specified in the decision for payment, calculation, recalculation of benefits/contributions, reimbursements, offsetting, and recovery procedures.
Individuals Receiving Benefits:
Impact: The amounts of benefits received may be affected by the currency conversion rates used, particularly in cross-border situations or when benefits are indexed.
Action Required: Be aware of the new procedures, though no direct action is required.
EU and UK Administrations:
Impact: The administrations overseeing social security coordination will need to ensure that their respective institutions are following the new guidelines.
Action Required: Ensure social security institutions adhere to the decision and update internal processes accordingly.
Key Entities Referenced
European Union: One of the parties to the Trade and Cooperation Agreement.
European Atomic Energy Community: One of the parties to the Trade and Cooperation Agreement.
United Kingdom of Great Britain and Northern Ireland: One of the parties to the Trade and Cooperation Agreement and Agreement on the withdrawal of the United Kingdom from the European Union.
Trade and Cooperation Agreement: An agreement between the European Union, the European Atomic Energy Community, and the United Kingdom of Great Britain and Northern Ireland concerning trade and cooperation.
Specialised Committee on Social Security Coordination: A committee established by Article 81P of the Trade and Cooperation Agreement responsible for social security coordination.
Protocol on Social Security Coordination: A protocol to the Trade and Cooperation Agreement that outlines the rules for social security coordination between the parties.
European Central Bank: The financial institution designated to provide the reference rate for currency conversions and interest on late payments.
London: Place where the decision was made.
14.7.2023 EN Official Journal of the European Union L 179/147
DECISION No 2/2023 OF THE SPECIALISED COMMITTEE ON SOCIAL SECURITY
COORDINATION ESTABLISHED BY ARTICLE 8(1)(P) OF THE TRADE AND COOPERATION
AGREEMENT BETWEEN THE EUROPEAN UNION AND THE EUROPEAN ATOMIC ENERGY
COMMUNITY, OF THE ONE PART, AND THE UNITED KINGDOM OF GREAT BRITAIN AND
NORTHERN IRELAND, OF THE OTHER PART,
of 28 June 2023
as regards the designation of the financial institution to serve as reference to determine the interest
rate for late payments and the exchange rate for currency conversions, as well as the date to be
taken into consideration for determining the rates of currency conversion [2023/1460]
THE SPECIALISED COMMITTEE ON SOCIAL SECURITY COORDINATION,
Having regard to the Trade and Cooperation Agreement between the European Union and the European Atomic Energy
Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part(1), and in
particular Articles SSCI.53(2) and SSCI.73 of its Protocol on Social Security Coordination,
Whereas:
(1) Pursuant to Article SSCI.53(2) of the Protocol on Social Security Coordination (the ‘Protocol’) to the Trade and
Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one
part, and the United Kingdom of Great Britain and Northern Ireland, of the other part (the ‘Trade and Cooperation
Agreement’), the interest for late payments is to be calculated on the basis of the reference rate applied by the
financial institution designated for this purpose by the Specialised Committee on Social Security Coordination (the
‘Specialised Committee’) to its main refinancing operations.
(2) Many provisions, such as Articles SSC.6(a), SSC.19(1), SSC.26, SSC.47 and SSC.64, SSCI.22(4) and (5), SSCI.23(7),
SSCI.56, SSCI.57, SSCI.62 and SSCI.64 of the Protocol, contain situations where, for the purposes of the payment,
calculation or recalculation of a benefit or contribution, a reimbursement, or for the purposes of offsetting and the
recovery procedures, the exchange rate needs to be determined.
(3) Pursuant to Article SSCI.73 of the Protocol, for the purposes of the Protocol and its Annex SSC-7, the exchange rate
between two currencies is to be the reference rate published by the financial institution designated for this purpose
by the Specialised Committee. The date to be taken into account for determining the exchange rate is to be fixed by
the Specialised Committee.
(4) The Specialised Committee notes that, while the rules on social security coordination laid down in the Agreement on
the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the
European Atomic Energy Community(2) are legally separate from those laid down in the Trade and Cooperation
Agreement, using the same financial institution for both agreements, as well as the same fixed date to be taken into
account for determining the exchange rate, would be preferable, as it would avoid complications for the social
security institutions implementing those agreements and mitigate the risk of errors,
HAS ADOPTED THIS DECISION:
Article 1
The European Central Bank shall be the financial institution designated for the purposes of Articles SSCI.53(2) and SSCI.73.
(1) OJ L 149, 30.4.2021, p. 10.
(2) OJ L 29, 31.1.2020, p. 7.L 179/148 EN Official Journal of the European Union 14.7.2023
Article 2
For the purpose of this Decision, the rate of conversion shall be understood as a daily conversion rate published by the
European Central Bank.
Article 3
If not otherwise stated in this Decision, the rate of conversion shall be the rate published on the day when the operation is
performed.
Article 4
An institution of a State, which for the purpose of the establishment of an entitlement, and for the first calculation of the
benefit, has to convert an amount, shall use:
(a) when, according to national legislation or the Protocol, an institution takes into account amounts, such as earnings or
benefits, during a certain period before the date for which the benefit is calculated, the rate of conversion published on
the last day of that period;
(b) when, according to national legislation or the Protocol, for the purpose of calculation of the benefit an institution takes
into account one amount, the rate of conversion published on the first day of the month immediately preceding the
month when the provision must be applied.
Article 5
Article 4 shall apply mutatis mutandis when an institution of a State for the recalculation of the benefit due to changes in the
factual or legal situation of the person concerned, has to convert an amount.
Article 6
An institution of a State which pays a benefit that is regularly indexed in accordance with the national legislation, and where
the amounts in other currency have an impact on that benefit, shall, when recalculating it, use the rate of conversion
published on the first day of the month preceding the month when the indexation is due, unless provided for differently in
the national legislation.
Article 7
For the purposes of Article SSCI.73 of the Protocol, the date to be taken into account for determining the applicable
exchange rate between two currencies shall be:
(a) in the case of a request for offsetting from arrears/ongoing payments, the working day immediately preceding the day
on which the applicant party sent the final request for offsetting from arrears/ongoing payments; or
(b) in the case of a request for recovery, the working day immediately preceding the day on which the applicant party sent
the first request for recovery.
For the purposes of this Article, working day shall refer to a working day of the European Central Bank on which it
publishes a daily reference rate for currency exchange.
Article 8
This Decision shall enter into force on the date of its adoption.14.7.2023 EN Official Journal of the European Union L 179/149
Done at London, 28 June 2023.
For the Specialised Committee on Social Security
Coordination
The Co-chairs
Jordi CURELL GOTOR
Ronan O’CONNOR