Post Brexit Social Security for EU and EEA Cross Border Workers
One of the big post-Brexit considerations for internationally mobile employees is where social security is due.
Prior to 1 January 2021, Regulation (EC) No 883/2004 determined where social security was due when an employee was either posted to another country as part of an assignment within the EEA, or when their role required duties to be performed in a number of different countries at the same time. The Regulation determines that, generally, social security contributions are only payable in one country at any one time and an employer can obtain an A1 certificate of continuing liability, to ensure that both employee and employer contributions are paid in only one country.
As part of the transitional provisions of Brexit, assignments and multi-state working arrangements that commenced prior to 1 January 2021, between the UK and another EEA Member State, which previously would have been covered by the existing Regulation, would still fall under the previous rules as long as the arrangement continued without breaks or material change.
For working arrangements that commence on or after 1 January 2021, the Regulation will no longer apply and, instead, cross-border working arrangements between the UK and EU Member States will be governed by the EU-UK Trade and Cooperation agreement, which includes a protocol on Social Security Coordination. Where the protocol applies, an A1 certificate can be obtained, which maintains the principle that cross border workers should only fall under the social security regime of one country at any one time.
The protocol allows UK individuals who have been sent by their UK employers to work temporarily in an EU Member State, for periods of up to 24 months, to remain within the scope of UK National Insurance. As a result, there may be no social security due in the host country. Similarly, any individuals coming to work temporarily in the UK under the terms of the protocol will not be required to pay UK National Insurance, as long as an A1 certificate has been issued.
Under the old Regulation, it was possible to extend the initial 24 month period, up to a maximum of 5 years, subject to agreement from both countries, however there is no such option in the protocol.
A Multi-State Worker under the protocol is an individual who normally works in the UK, but also spends at least 5% of their time working in one or more EU jurisdiction. The arrangements under the protocol are generally the same as they were under the old Regulation, i.e. an individual is liable to social security contributions in the jurisdiction in which he or she is habitually resident, if at least 25% of their UK or EU working time is spent in that jurisdiction.
The previous Regulation also covered Iceland, Liechtenstein, Norway and Switzerland, however the new rules are slightly different for these countries for arrangements that commenced after 1 January 2021.
- Norway – A certificate can be obtained to cover the a temporary post for up to 3 years; however, it should be applied for prior to the arrangement commencing and no later than 4 months after if starts.
- Switzerland – A certificate can be obtained to cover temporary posts of up to 2 years. This will not apply to self-employed individuals.
- Iceland – A certificate is only available to employees that are non-UK and non-EEA nationals. An initial certificate will only be granted for a 12 month period, with the option to extend by a further 12 months, with agreement from the host country authorities. The application to extend must be lodged before the initial period ends.
- Liechtenstein – There is no agreement in place and so Liechtenstein should be considered a ‘non-agreement country’ for social security purposes.
Where a certificate is not generally available (e.g. for workers in Liechtenstein or Iceland), social security contributions should be paid in the country the individual is working. However, the home country may also still require contributions to be paid for an initial 52 week period, resulting in a double charge to social security.
Contact [email protected] if you require assistance with cross-border social security, whether you are an employer, employee or self-employed.