Beyond Brexit: Social Security Coordination as of January 2021
| Wim Cocquyt | Kristine Zaiceva

Beyond Brexit: Social Security Coordination as of January 2021

On 24 December 2020, the United Kingdom and the European Commission signed the EU-UK Trade and Cooperation Agreement (Agreement). This Agreement marks the end of the transition period under the Withdrawal Agreement (WA) with which the UK had left the EU in the beginning of 2020.
The UK left the EU with a Deal on 31 January 2020.
The WA introduced a transition period starting 1 February 2020, during which, in practice, there were no real changes to the relationship between the UK and the EU until 31 December 2020.
From a social security perspective, this meant that the EU Regulations on the coordination of national social security systems continued to operate in the same way for workers moving cross-border between the UK, on the one hand, and one or more EU Member States (including also the other European Economic Area (EEA) Member States (Iceland, Liechtenstein and Norway), as well as Switzerland. For example, employees that were temporarily sent abroad by their employer to perform work, could maintain – if all usual conditions were fulfilled – social security coverage in their home country up to 24 months and request an A1 form to that effect. In addition, they could also apply for a further extension, up to approx. five years, as per consolidated practice.
Protocol on Social Security Coordination
The new Agreement incorporates a Protocol on social security coordination (the Protocol) that outlines a number of measures aimed at protecting the social security rights of UK nationals, EU citizens and third country nationals, stateless persons and refugees legally residing in the UK or the EU, and are in a cross-border situation starting as of 1 January 2021. The Protocol is applicable for situations involving the UK and EU Member States. Different rules will apply for situations between the UK, on the one hand, and the EFTA member States (Norway, Iceland, Lichtenstein, and Switzerland), on the other. It is the intention of the HMRC to stipulate a European Economic Area (EEA)-wide Agreement on Social Security coordination, as well as a new bilateral social security agreement with Switzerland.
The Protocol is set to be valid for 15 years from the conclusion of the Agreement.
The Protocol mirrors EU Social Security Coordination Regulations to a certain extent, including:
  • Provisions on equal treatment
  • Aggregation of insurance periods
  • Applicable legislation
  • Exportability of benefits
Regarding the applicable social security legislation, the Protocol maintains the principle that individuals covered shall be subject to the legislation of one single jurisdiction only.
General Rules
  • A person pursuing an activity as an employed or self-employed person in a State shall be subject to the legislation of that State
  • A civil servant shall be subject to the legislation of the State to which the administration employing the civil servant belongs
  • Any other person shall be subject to the legislation of the State of residence. There are special provisions for workers on board of a vessel at sea flying the flag of another State or for flight and cabin crew members of airline companies that are similar to the rules in force before 1 January
By way of derogation from the general rule, employees sent by their employer as of 1 January 2021, to perform work in another State on a temporary basis, may continue to be subject to the social security legislation of their home country provided that the duration of the assignment doesn’t exceed 24 months and they are not replacing another detached worker. 
While the main rules for these detached workers remain broadly the same, the Protocol does not include the possibility that the UK and the EU member state in question exceptionally agree on a further extension of home country coverage.
In addition, considering the new Agreement does not contain directly applicable legal provisions, the Protocol also stipulates that each EU Member State must individually agree to apply the above derogations for detached workers before 1 February 2021, to become effectively applicable. Those EU member states that opt-in will be included as Category A countries in a specific Annex to the Agreement.
At this stage, we have received informal confirmation that all EU member states are opting in to the derogation rules of the Agreement and we expect the European Union will notify the UK of their retro-active applicability as of 1 January 2021 soon.
The Agreement also contains a derogation for workers that pursue activities in two or more States at the same time. Similar to the rules in force under the EU Regulations until 31 December 2020, multi-State workers will remain subject to the social security legislation of their country of (habitual) residence, on the condition they perform a substantial activity in that country. If not, the workers will become subject to the legislation of the country of their employer. It is expected that, for the purpose of determination of the applicable legislation, at least in the initial period, the same criteria as before will be used by both the UK and the EU member states (25% -rule).
What does it mean for companies?
  • Cross-border situations between the UK and one or more EU Member States started before 1 January 2021: Employees in existing cross-border scenarios as per 31 December 2020 continue to be protected under the WA and shall remain covered by the EU social security coordination rules, as long as their work situation continues “without interruption.”  A1 certificate extensions beyond the period of 24 months is likely to be possible.
  • Cross-border situations between the UK and one or more EU Member States started after 1 January 2021: as it has been informally confirmed at EU level that all member states will opt in to the derogation rules for detached workers, employers will be able to continue to post workers from the UK to an EU member state, and vice versa, while maintaining home country coverage for up to 24 months. Afterwards, it is likely that the domestic social security provisions of the host country will apply,unless new and/or different international coordination rules will be agreed upon between the UK and the EU member states. If workers qualify as multi-State workers, they will in principle be able to maintain social security coverage in their country of residence or in the country where the employer is based, according to the Agreement.  
How Fragomen can help
Fragomen can assist by partnering with you to monitor the approach taken by the social security authorities of the member states and of the UK when applying the provisions of the new Agreement, in practice, going forward, and outline the impact on your business. Thanks to our government strategies approach, we can help you with the implications post-Brexit for your workforce, both from an immigration and social security perspective.
If you have questions regarding the matters described in this blog, including the immigration and social security impact post-Brexit, please do not hesitate to contact Wim Cocquyt, at [email protected], or Kristine Zaiceva, at [email protected]
This blog was published on 27 January 2021, and due to the circumstances, there are frequent changes. To keep current with all the latest updates on global immigration, please visit our COVID-19 microsite, subscribe to our alerts and follow us LinkedIn.