Virginia, US

To prepare for a no deal scenario, the European Parliament and the Council of the EU have adopted an EU Regulation to protect the social security rights of UK and EU citizens who have exercised their right to free movement to work before Brexit. These European measures represent an additional layer of protection to the contingency measures already adopted on a unilateral basis by a number of EU Member States, at a national level.

Key Points

One of the most severely impacted areas in case of a ‘hard’ Brexit is social security coordination in case of cross-border work. As we informed previously, with ‘Regulation (EU) 2019/500 of 25 March 2019 establishing contingency measures in the field of social security coordination following the withdrawal of the United Kingdom from the Union’ (hereafter: the Regulation), the EU wishes to protect, unilaterally, both the nationals from the UK and the Member States, the social security rights they have built up before the day Brexit comes in. The new Regulation will become applicable as from the day after UK's withdrawal from the EU and only in the event of a no deal Brexit.

The Regulation ensures that the social security rights and entitlements of the above-mentioned nationals are protected  as to facts or events that occurred, and periods of insurance, (self) employment or residence completed, before the withdrawal date, meaning that that EU Member States will unilaterally continue to apply the core principles of EU social security coordination, like  equal treatment, assimilation and totalisation.

Important to note is that the Regulation:

  • only contains measures limited in scope (access to social security rights or benefits);
  • does not cover any periods of insurance or events occurring after Brexit;
  • does not automatically guarantee payment of benefits (pensions) abroad;
  • does not rule on the applicable legislation, after Brexit, giving rise to potential double social security liabilities;
  • does not automatically ensure continued provision of medical care;
  • does not cover cross-border workers that are Third Country Nationals.
 
As things now stand, and although both the UK and the EU officially expressed the intention and goodwill to cooperate in this area, there is no real initiative between the EU and the UK covering social security coordination post-Brexit.
 

Next steps

Considering the significant impact of a no deal Brexit on the social security position of the global mobility workforce, including short term travellers, in terms of  potentially higher social security costs and/or loss of social security entitlements (e.g. pension rights, health care coverage), companies need to re-visit the current cross-border work arrangements with UK and ensure appropriate contingency plans are set up to  counter any negative impact of a no deal Brexit. Fragomen can help in this respect, through the integration of our contingency planning initiatives and deliverables in the area of both Immigration and Social Security.