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PR(01)35: A letter of formal notice sent to Norway for failure to comply with rules in the field of social security

18.9.2002

On 19 December 2001, the EFTA Surveillance Authority sent a letter of formal notice to Norway for failure to comply with EEA rules in the field of social security.

Act No. 41 of 26 June 1998 concerning Cash Benefit for Parents with Small Children (Cash Benefit Act) lays down the conditions for entitlement to the Norwegian Child Care Benefit (Kontantstøtten). Sections 2 and 3 of the Cash Benefit Act stipulate a residence condition for both the child and the person with whom the child is living permanently.

The Norwegian Government recognises the cash benefit granted under the Act as family benefits under Council Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (hereinafter referred to as "Regulation 1408/71") and it has stated that the benefit should be exported according to Regulation 1408/71.

However, the Norwegian Government decided that the benefit should not be granted to children and parents who are not residents in Norway as a proposal concerning the entry of the Norwegian Child Care Benefit into Annex IIa to Regulation 1408/71 was to be submitted to the European Commission. The special non-contributory benefits that are listed in Annex IIa to Regulation 1408/71 are excluded from export. On 17 May 2001, the Commission confirmed that the above-mentioned proposal could not be accepted. Nevertheless, the Government has informed the Authority that it maintains its refusal to export the child care benefit since a case concerning a similar Finnish benefit is now pending before the Court of Justice of the European Communities. This has, however, no bearing on the current legal situation.

It follows from Article 73 of Regulation 1408/71 that workers or self-employed persons are entitled, in respect of the members of their families who are residing in an EFTA EEA State other than Norway or in an EC State, to the family benefits provided for by the Norwegian legislation, as if they were residing in Norway. The purpose of Article 73 is to overrule the residence requirement in national schemes.

The Authority has therefore concluded that Norway, by refusing to pay cash benefit in respect of children who reside in another EFTA State than Norway or in an EC State, to workers who are subject to the Norwegian legislation and with whom the children live permanently, is in breach of Article 73 of Regulation 1408/71.

The Norwegian Government has been invited to submit its observations to the content of the letter of formal notice within three months of its receipt. In light of these observations the Authority will consider whether to proceed with the case.

For further information, please contact Peter Dyrberg, Director, (Legal and Executive Affaires) on telephone +32 (2) 286 1830.

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