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Determining the applicable national social security scheme

An overview of the main rules and regulations regarding the determination of the applicable national social security scheme. Includes information on posting, changing place of work, and special rules for civil servants and diplomatic missions.

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Determining the applicable national social security scheme

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  1. Determining the applicable national social security scheme An overview of the main rules in Regulations n° 883/2004 & 987/2009,

  2. Co-ordination of social security schemes “Determination of the legislation applicable” • Is one of the basic principles of coordination • Provides an answer to: • «Where do I have to pay contributions?» • «According to which scheme will I get social security benefits?» applicable social security scheme (Reg 883/2004) by B. De Pauw

  3. Determining the applicable scheme Overarching principle Unicity of legislation avoids both positive and negative conflicts of law Strong & exclusive effects applicable social security scheme (Reg 883/2004) by B. De Pauw

  4. applicable social security scheme (Reg 883/2004) by B. De Pauw

  5. The EU social security provisions • Since 1972: • Regulation n° 1408/71 & its Implementing Regulation n° 574/72 • European Economical Area (EEA) • Agreements with Switzerland (2002) • Regulation n° 859/2003: extension to third country nationals (2003): • In an intra-EU cross-border situation • Legally resident in the territory of an EU Member State • [Not accepted by Denmark] applicable social security scheme (Reg 883/2004) by B. De Pauw

  6. A reform • Starting from 1 May 2010: • Regulation (EC) n° 883/2004 its implementing Regulation n° 987/2009 • But: • … a transitional period of 10 years for the Chapter on applicable legislation in case of an unchanged prior existing situation • … no extension to third-country nationals yet (2012?) • … not applicable to Switzerland yet (2011?) • … not applicable to Iceland, Norway and Liechtenstein yet (2011?) applicable social security scheme (Reg 883/2004) by B. De Pauw

  7. Activities in the territory of one State (employee / self-employed) State of work (Lex loci laboris) Exception: Posting Special rules Activities in the territory of several States (employee / self-employed) * State of habitual residence * State where the employer is situated Special rules Determining the applicable scheme applicable social security scheme (Reg 883/2004) by B. De Pauw

  8. “Lex loci laboris” applicable social security scheme (Reg 883/2004) by B. De Pauw

  9. Changing place of work applicable social security scheme (Reg 883/2004) by B. De Pauw

  10. Changing place of work Coveragein the State where activities are carried out for a short period of time = ADMINISTRATIVE COMPLICATIONS applicable social security scheme (Reg 883/2004) by B. De Pauw

  11. Posting A definition • An employee / self-employed person • is sent abroad by his employer / goes abroad • to perform a well-defined task • for a limited time • whilst remaining under the authority of his employer • whilst continuing to maintain, in the State of origin, the necessary means to carry on the self-employed activity so as to be in a position to pursue it on his return. applicable social security scheme (Reg 883/2004) by B. De Pauw

  12. Posting Consequences • The employee / self-employed person continue to be covered by their habitual social security scheme (the sending State) • The employer / self-employed person are exempted from the payment of social security contributions in the receiving State applicable social security scheme (Reg 883/2004) by B. De Pauw

  13. Administrative Commission: Decision A2 Substantive conditions Posting guide Substantive conditions PostingSubstantive conditions – interpretations & guidelines applicable social security scheme (Reg 883/2004) by B. De Pauw

  14. PostingSubstantive conditions • Social security coverage prior to the posting • How long? • Decision A2 • Employees 1 month – Self-employed workers: 2 months • The employer must • “Habitually” carry on “significant activities” in the sending State • Caselaw ECJ - Fitzwilliam & Plum • Old Posting guide: 25% turnover – 4 months of activities └► in Regulation 987/2009 art. 14 §2 with a series of criteria (i.e. not purely management activities) applicable social security scheme (Reg 883/2004) by B. De Pauw

  15. Posting • Expected maximum duration: • 24 months applicable social security scheme (Reg 883/2004) by B. De Pauw

  16. Posting • For self-employed persons: • Similar activity (→ actual nature of the activity) applicable social security scheme (Reg 883/2004) by B. De Pauw

  17. Portable Document A1 Model Administrative Commission Formalities in case of posting A1 applicable social security scheme (Reg 883/2004) by B. De Pauw

  18. Special rules • Civil servants Continue to be insured in the State in whose Administration they are employed • Staff members of diplomatic missions Principle: the State of work, but possibility to opt for the scheme of the sending State (when being a national of that Member State) • Auxiliary staff of the EU Choice: the State of work, the State they were last subject to, or the State of their nationality → Contract staff applicable social security scheme (Reg 883/2004) by B. De Pauw

  19. Simultaneous activities"normally employed in the territory of two or more Member States" applicable social security scheme (Reg 883/2004) by B. De Pauw

  20. Activities in the territory of one State (employee / self-employed) State of work (Lex loci laboris) Exception: Posting Special rules Activities in the territory of several States (employee / self-employed) * State of habitual residence * State where the employer is situated Special rules Simultaneous activities applicable social security scheme (Reg 883/2004) by B. De Pauw

  21. Simultaneous activitiesEmployee • Substantially working in the State of residence (25%)? • Not substantially working in the State of residence? BUT: if ≠ employers established in ≠ States applicable social security scheme (Reg 883/2004) by B. De Pauw

  22. Simultaneous activitiesEmployee (1) The Netherlands Belgium (4d/wk)  Dutch employer The Netherlands (1/wk)  Dutch employer applicable social security scheme (Reg 883/2004) by B. De Pauw

  23. Simultaneous activitiesEmployee (2) The Netherlands Belgium (4d/wk)  Belgian employer A The Netherlands (1/wk)  Belgian employer B applicable social security scheme (Reg 883/2004) by B. De Pauw

  24. Simultaneous activitiesEmployee (3) The Netherlands Belgium (4d/wk)  Belgian employer The Netherlands (1/wk)  Dutch employer applicable social security scheme (Reg 883/2004) by B. De Pauw

  25. Simultaneous activitiesSelf-employed • Substantial activities pursued in the State of residence? • No substantial activities in the State of residence? applicable social security scheme (Reg 883/2004) by B. De Pauw

  26. Simultaneous activitiesSelf-employed The Netherlands Belgium 60% Luxemburg  25% The Netherlands  15% applicable social security scheme (Reg 883/2004) by B. De Pauw

  27. Simultaneous activitiesEmployee & self-employed Entirely covered in the State where the employed activities are pursued applicable social security scheme (Reg 883/2004) by B. De Pauw

  28. Simultaneous activitiesCivil servant +Employee & self-employed Civil servant & employee and/or self- employed  State of civil servant applicable social security scheme (Reg 883/2004) by B. De Pauw

  29. Special rules • Mariners • Main rule: Covered in the State whose flag the ship is flying • Exception: Employer & residence of the mariner in the same Member State: covered in that State applicable social security scheme (Reg 883/2004) by B. De Pauw

  30. The Escape Clause • Two ormore Member States, the competent authorities of these States or the bodies designated by these authorities may • by common agreement • provide for exceptions • to the provisions of articles (11-15) • in the interest of certain categories of persons or of certain persons. applicable social security scheme (Reg 883/2004) by B. De Pauw

  31. applicable social security scheme (Reg 883/2004) by B. De Pauw

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