Social Security Schemes
- Do you know where your employees are situated?
- Do you have the relevant documentations for cross-border employees?
Are you a cross-border employee during the transition period?
- During the transition period the EU Reference Rules of Regulation still apply to determine where a cross-border employee should pay social security.
- The “Reference rules of Regulation (EU) 883/2004” coordinates social security schemes throughout Europe.
- Provisions on aggregation of periods, entitlement to and export of social security benefits remain unchanged.
- Read more on the Reference rules of Regulation (EU) 883/2004: https://ec.europa.eu/social/main.jsp?catId=849&langId=en
Are you in a cross-border contract before 31 December 2020 that will continue after 1 January 2021?
- Reference rules of the EU regulation 883/2004 and both the export and aggregation of periods will still apply if:
- The cross-border situation between the EU and the UK began prior to 31 December 2020
- and will continue without an interruption.
- Definitions of “interruptions” vary between each state and the European Commission but could include sickness or extended vacations.
- Belgium – UK worker will benefit from Belgian social security, but if this changes to a UK contract, they will fall under UK social security but still under the provisions of the EU regulation 883/2004.
- If you are an employee who then becomes self-employed (vice versa) you may also be in a situation to continue under EU regulation 883/2004.
- An “interruption” to your cross-border situation may stop the provision of the social security entitlements under the withdrawal agreement.
- Make sure employees in a cross-border situation have proper documentation (apply for an A1 before 31 December 2020, or have all the documents to prove one was already in a cross-border situation before end of transition period)
- Monitor ‘continued situations’ very closely.
Are you entering a cross-border contract after 31 December 2020?
- There are discussions on a multilateral treaty on social security. If no treaty is established, domestic rules will apply to you.
- You could be subject to multiple social security schemes at the same time.
- There will no longer be aggregation of periods.
- You can no longer export benefits, unless domestic legislation allows this.
UK Domestic Rules:
- You can have 52 weeks remaining subject to UK social security for outbound assignments.
- As well as this exemption for inbound assignments. It is uncertain whether this also applies to EU nationals.
- The NIC exemption is now also available to European Economic Area (EAA) nationals, who are coming to work in the UK, but live outside the EEA.
- To qualify for a 52-week National Insurance Contribution (NIC) exemption you must:
- Not be an ordinary resident in the UK.
- Not be ordinarily employed in the UK.
- Be in search of employment primarily based outside of the UK, with a non-UK based employer.
- Be employed for a time in the UK as an employed earner.
- Organizations should review their UK inbound assignees.
- Determine whether some employees can claim back any NIC previously paid.
- Determine whether payroll may should be adjusted.
Belgian Domestic Rules:
- If you work in Belgium for a Belgian employer, you are subject to Belgian social security.
- If a UK employer sends an employee to Belgium (inbound assignment), that employee may apply for the Article .3 exemption.
- Outbound assignments may go to a non-treaty country and still be subject to Belgian social security for 6 months with the possibility to extend this for a further 6-months.
- Alternatively, a voluntary system of overseas social security could be explored.
The information provided on this page does not constitute legal advice and is subject to change in line with government rules and laws. While BritCham will endeavour to keep the information on these pages as current as possible, we advise you to seek expert independent legal advice an any matters relevant to your situation