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How are your social security rights impacted by Brexit?

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The good news is that the Withdrawal Agreement provides continued social security protection from 1 January 2021, but it is important to understand whether your or your employees’ rights will be affected by Brexit.

Broadly those who have the right to reside in the UK or the EU after the end of the transition period, will keep their existing rights in full. If this is not the case but you have accrued past periods of residence, insurance or employment elsewhere in the EU these will be protected.

Pre-planned healthcare treatment and healthcare for temporary visits is also protected in certain circumstances.

What is the current position?

UK and EU nationals currently enjoy social security protection and equal treatment in relation to social security benefits and state funded healthcare when they are living or working anywhere in the EU (plus EEA, EFTA and Switzerland).

This includes protection such as:

  • Payments of social security contributions (e.g. UK national insurance contributions) are due in only one country
  • Time spent working in another EU country qualifies towards State Pensions
  • Healthcare and social security benefits are provided whilst you are living elsewhere in the EU

What will change from 1 January 2021?

Following the end of the transition period, the Withdrawal Agreement seeks to continue to provide existing rights and protection to certain eligible persons.

Who will effectively retain their existing rights in full?

The following will keep their existing rights and be within the full scope of the social security coordination provisions:

  • UK nationals lawfully residing or with the right to reside, in the EU on 31 December 2020 (and EU nationals living or with the right to reside, in in the UK)
  • UK/EU dual nationals who have acquired citizenship in the host country
  • Frontier workers (those who live in one EU country and work in another by 31 December and continue to do so)
  • Certain close family members, e.g. partners and dependent direct relatives such as children or grandchildren, of those above will also receive full rights
  • A ‘posted worker’ (overseas temporarily as at 31 December 2020) will be able to continue to access their rights in full whilst they are working in the UK/EU and they will continue to be under the legislation of the state of their employer, whether their posting may continue is determined by the host country

The above will be subject to only one country’s legislation at a time, receive any benefit they already receive, and be able to apply for new benefits.

For example, in relation to the payment of social security contributions:

A Spanish national working in the UK (and their UK employer) need only pay social security contributions to one member state at a time. In this scenario this would generally be National Insurance Contributions (NICs) in the UK

For example, for the purposes of qualifying for a state pension:

A French national living in the UK, who had seven qualifying years under UK legislation, and 38 years under French legislation, applies to the UK when they reach pension age to claim their UK State Pension. While the seven years worked in the UK does not meet the minimum qualifying period for a UK State Pension (10 years), the UK authority must take into account the years worked in France to meet this threshold and the French national would receive a proportion of a UK State Pension based on their UK national insurance record.

How might you lose your rights?

If your circumstances change, you may fall out of the scope and your rights will cease.

If you are fully in the scope of the provisions and have the right of residence in another state, it is possible to move away from that state for up to five years and keep your full rights.

If you have not yet acquired a right to permanent residence you can generally only move away for up to six months in a 12-month period (12 months if  deemed an ‘important’ reason).

Who will be partially within the scope?

For those who are not fully within the scope above, it is possible to retain certain rights that have already accrued and be partially in the scope of the provisions.

This includes UK nationals who have periods of residence, insurance and/or employment pre January 2021 in the EU (and conversely EU citizens in the UK). This also apples to dual UK/EU nationals and third country nationals who have such periods in the UK or the EU.

Those individuals partially in the scope can continue to rely on those past periods:

For example, a Slovenian national who worked and has paid National Insurance contributions for eight years in the UK between 2001 and 2009, and is living and working in Slovenia on 31 December 2020. While they will not be in full scope of the social security provisions, they will still be able to rely on these past periods for rights derived from them. In this case they will be able to rely on these contributions when they come to claim their State Pension in 2024, and so will be able to aggregate periods of insurance in Slovenia to meet the minimum qualifying period in the UK, and their UK State Pension will increase in line with those in the UK while they live in the EU.

Again, family members of the above will receive certain derived rights.

Partial rights also extend to certain benefits for example:

A UK national who works and resides in the UK on 31 December 2020, subject to UK legislation. Their Dutch partner and two-year-old child reside in the Netherlands on 31 December 2020. As the Dutch partner is unemployed the UK has primary competence for any family benefits for the family members living in the Netherlands. The Netherlands has secondary competence. In this case the UK pays Child Benefit for the child, and the Netherlands will pay a differential supplement, if required.

What about healthcare provisions?

The withdrawal agreement also extends to protect healthcare for those receiving state-funded planned treatment in another country if they have requested pre-authorisation or started planned treatment prior to 1 January 2021. This broadly includes UK nationals in the EU, and vice versa.

This is extended to unplanned treatment whilst temporarily overseas at 31 December 2020, for example, if a UK national commenced a three-year undergraduate course studying in Germany from September 2020, and they have an accident in Germany in December 2022, then they will be covered by this provision. This is also the case for UK nationals going on a holiday in the EU starting prior to 1 January 2021, who have an accident whilst on that holiday.

In summary

If you continue to have the right to live in the UK or the EU, then practically your rights will be unaffected, but care should be taken not to lose those rights. You may wish to check your or your employee’s status and right to be in the UK (or EU) in advance of 31 December 2020, to see how you or they might be affected.

If you want to discuss Brexit and its impact for you, please do get in touch with your usual Mercer & Hole contact or directly with Henry Lowe.

Henry lowe private client partner

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