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| Siobhan Owers | Iskra Nikolic Uskokovic

Brexit: Preparing for a Future UK Social Security System

The UK Government introduced the Immigration and Social Security Co-ordination (EU Withdrawal) Bill in the House of Commons on 20 December. 

The UK Government introduced the Immigration and Social Security Co-ordination (EU Withdrawal) Bill in the House of Commons on 20 December. The EU Withdrawal bill will revoke retained EU law and, importantly, end free movement for EU citizens as well as protect the rights of Irish citizens. The Bill contains a power which enables the UK Government to amend the retained social security coordination regime and deliver policy changes post EU exit.

Key Points

All EU nationals (and their families) who are covered by the social security legislation of an EU country can benefit from the European Social Security Co-ordination Regulations. They apply to employees and self-employed, civil servants, students and pensioners, but also to unemployed, not yet working or no longer working. The EU Regulations also apply to non-EU nationals and their family members who reside legally in the EU. The Regulations lay down common rules to protect social security rights when moving within the EU / EEA (i.e. including Iceland, Liechtenstein, Norway and Switzerland). However, it does not replace the national social security systems by one single European system. 

As such, for the UK Government, it is important to maintain consistency between the future immigration system and the availability of benefit support for EEA nationals. This is the reason why the UK Government is bringing forward social security legislative provisions into the Immigration and Social Security Co-ordination (EU Withdrawal) Bill, to enable the UK to respond to its withdrawal from the EU by making changes to its own social security arrangements, incorporating aspects of immigration.

The power will enable the UK Government to make suitable legislative provisions for a range of post-Brexit scenarios that may arise. In response to the outcome of negotiations with the EU, the power may need to be exercised to implement policy changes to the retained social security co-ordination rules. These rules cover a wide range of issues, developing a framework for future social security coordination policy:

  • how EU nationals can access certain UK benefits and pensions in future;
  • to what extent UK nationals can export certain benefits and pensions; and
  • what rules will apply to people that work and live in more than one country.
 
Brexit No Deal 
 
After months of negotiation, the UK and EU had finally come up with a Withdrawal Agreement that was approved by the EU and by the UK Government on November 14, but still needs to be ratified by the UK parliament, before Brexit Day in March 2019. This means that the UK still might leave the EU without a deal.
 
In order to protect individual social security rights in case of a No Deal scenario, the UK Government has taken the following steps:
 
  1. On 13 December 2018, the UK Government has published a Statutory Instrument and Explanatory Memorandum in respect of the EU Social Security Coordination rules. The instrument aims to maintain the current EU rules on a unilateral basis through UK domestic legislation. However, in order for the EU rules to continue to apply, the draft legislation should be accepted by the relevant EU/EEA countries. If not, this may result in additional social security contributions due in the EU/EEA countries, and additional reporting and compliance obligations for employers.
  2. In addition, the UK has reached an agreement with Switzerland, which protects the rights of UK and Swiss nationals who have chosen to call each other’s countries as their ‘Home country’.
 
This means that UK and Swiss nationals living in each other’s countries upon expiry of the transition period, in a ‘deal’ scenario, will be able to continue enjoying broadly the same rights as they do now. This includes arrangements on residency, access to healthcare, pensions and education, social security coordination and mutual recognition of professional qualifications.
 
This agreement, once ratified by both Governments, would also apply in a ‘no deal’ scenario, in which case it would apply to UK and Swiss nationals living in each other’s countries before Brexit day.
 
Conclusion

The position of the UK Government in its negotiations with the EU, aiming at achieving fair principles, which will protect individual’s rights and treat all countries consistently, is still not final.  The Immigration and Social Security Co-ordination (EU Withdrawal) Bill will allow the UK Government to revoke or amend the EU Social Security Co-ordination Rules as retained by the EU Withdrawal Act 2018 and provide powers to the UK Government to set out new rules on Social Security Co-ordination for EU nationals in the UK.

 
For any social security related question, please contact us at fragomensocsec@fragomen.com or Siobhan Owers at SOwers@Fagoemen.com and Iskra Nikolic Uskokovic at INikolicUskokovic@Fragomen.com.