Getting Ready for Brexit – Social Security
Getting Ready for Brexit – Social Security
What you need to consider if there is No deal or if there is some kind of deal, including country specific information about Sweden.
Social security in Europe is governed by the European Social Security Coordination Regulations which apply to the EU, EEA and Switzerland. These rules will cease to apply to the UK after Brexit.
Who Will be Affected and How?
- Companies temporarily moving employees from the UK to the EU will need to be aware of individual Member State rules for UK nationals.
- Companies temporarily moving employees from the EU to the UK will need to be aware of the new rules for EU Nationals in the UK
- Employees will want to be informed about their rights under the new arrangements
What Happens Next?
Deal
Transitional arrangements will maintain the existing rules until 31 December 2020.
No Deal
- Location of Contribution Payments – EU to UK
Recent guidance suggests (but does not guarantee) that UK social security will not be payable for employees temporarily working in the UK subject to certain criteria being met. The criteria will not be established until after Brexit.
Companies need to be prepared to react as soon as the details about the new criteria become available.
- Location of Contribution Payments – UK to EU
Employees in possession of a valid A1 certificate will be valid until the end date on the certificate. Employees temporarily relocating to another EU country after Brexit should continue to make an A1 application on the same form that is currently in use.
It is important to be aware that the A1 certificate only means that contributions can continue to be paid in the UK. It does not mean that contributions are not payable in the other Member State. It is therefore possible that companies will have to make contributions both in the UK and in the EU country. The regulations will be determined at a national level, not at an EU level.
Companies may therefore need to apply different rules in different EU countries.
Pensions
Both the EU Commission and the UK have confirmed that aggregation rights accrued prior to Brexit will be protected. There is no agreement in place for the position for the post Brexit environment. National level negotiations between individual Member States and the UK will be necessary.
Healthcare
Current agreements allow all EU nationals to receive healthcare in the EU country they are living in in the same way as local residents. The UK has confirmed that for 6 months after Brexit they will continue to fund healthcare benefits for UK nationals in the EU (for those in possession of an S1 form). The EU position on healthcare has not yet been confirmed.
Companies will need to consider whether private healthcare insurance will be necessary for relocating employees as well as those undertaking short term business travel.
Country Specific Information – Sweden
Sweden and the UK have a bilateral social security agreement which came into force in 1988. It is hoped that it might be possible to rely on this bilateral agreement after Brexit but this may be subject to legal challenge. It should also be borne in mind that the bilateral agreement does not offer the same comprehensive level of coverage as the existing regulations.
Sweden has confirmed that in the event of a no deal exit, the proposal is for UK citizens to remain in Sweden with the same access to social security arrangements as apply today, for a period of 1 year. For Swedish citizens in the UK the advice is to obtain a statement of UK National Insurance Contributions paid to protect future claims in Sweden.
Update 2019-10-11
In a press release today, 11 October 2019, the Swedish Government has announced a proposal allowing Swedish citizens to continue to receive certain social security benefits in the event of a possible ‘no deal’ Brexit. The original end date was 31 December 2019 and the new proposal revises this to a period of six months, calculated from when the UK leaves the EU. We are closely monitoring the developments of the proposal.
Please contact us if you would like to know more.
Read more:
The article in Swedish
Victoria Robinson
Global Mobility Services
+46 72 186 90 02
victoria.robinson@kpmg.se
