As a result of the United Kingdom's withdrawal from the EU (Brexit) as of 1 January 2021, the Agreement on the Free Movement of Persons between Switzerland and the EU (FMPA) and Regulations (EC) No. 883/2004 and (EC) No. 987/2009 on the coordination of social security systems no longer apply between Switzerland and the United Kingdom.
Until a new framework is applied, the bilateral Social Security Agreement of 1968 that is still in place, remains applicable. This agreement allows postings of social security benefits for employees whose assignment began after 31 December 2020.
To safeguard rights granted under (EC) No. 883/2004, Switzerland has concluded an agreement on citizens’ rights with the United Kingdom. This agreement is applicable as per 1 January 2021 and maintains the rights established for Swiss and UK nationals under (EC) No. 883/2004 before 1 January 2021. On 15 December 2020, the Swiss-EU Joint Committee on the Free Movement of Persons extended this protection of rights to EU nationals and cross-border situations involving the European Union. The EU regulations Ord. 883/2004 and Ord. 987/2009 will therefore still apply in the following cases:
New applications will need to be made under the bilateral Social Security Agreement of 1968 until the new framework is applied. However, for this transitional period, split contributions are to be avoided and special agreements according Art. 7 of the bilateral Social Security Agreement of 1968 should be applied with the authorities for multi-state worker situations starting after 31 December 2020.
For more information please refer to our GMS Flash Alert from 25 January 2021 and the publication from the Swiss Federal Scoial Insurance Office (BSV).
To once again regulate social security relations in a comprehensive and systematic manner, the two countries have negotiated a new bilateral agreement which has recently been approved by the Swiss Federal Council. This agreement is important to ensure the coordination of social security legislation throughout both states in a most effective way.
The new social security agreement grants insured persons largely equal treatment and facilitated access to social security benefits. It avoids over-insurance and insurance gaps for people who meet the social security systems of both states. It also facilitates the temporary deployment of workers in the other state. The agreement itself largely corresponds to the coordination of social security systems within the new trade and cooperation agreement between the EU and the UK. It is based on the principles of the EU coordination law which Switzerland applies under the FMPA. The text of the agreement itself has not yet been published. Nevertheless, it is known that split contributions are to be avoided.
The agreement is to be applied provisionally after consultation with the relevant parliamentary commissions. For information on further details, the publication of the text of the agreement itself must be awaited.
Despite the issuance of the new bilateral agreement between the UK and Switzerland as well as the new trade and cooperation agreement in place between the UK and the EU, certain setups should be reviewed thoroughly from a social security perspective in order to avoid any incorrect application of social security legislation. With the UK no longer being part of the EU and with Switzerland not applying the (EC) No. 883/2004 to non-EU / non-Swiss nationals, the application of the correct legislation for such cases needs to be assessed accordingly.
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