Social Security considerations for workers post-Brexit

08 February 2021

EU Social Security rules from 1 January 2021

In the run up to the end of the UK’s transition period from the EU (31 December 2020) the UK followed EU social security coordination rules. Broadly, these rules were in place to ensure individuals and employers would make social security contributions in only one country at a time and this would usually be the country in which an individual was working. There were further rules that applied to individuals who work in multiple jurisdictions as well as specific treatment for so called ‘detached workers’ (individuals sent by their employer on a temporary work posting).

The signing of the EU-UK Trade and Cooperation Agreement on 24 December 2020 was therefore welcome news to many EU and UK based individuals, and employers with working populations within the EU and the UK, who were previously facing uncertainty around where they would be due to pay social security contributions following the end of the transition period (1 January 2021 onwards).

The EU-UK Trade and Cooperation Agreement includes a substantial Protocol on Social Security Coordination, which, in principle, aims to ensure social security contributions are paid in only one jurisdiction (that being the country where the work is undertaken). For ‘detached workers’ in particular, there was a requirement for each EU Member State to opt in individually in order for these workers to receive similar treatment to that which was in place prior to the end of the transition period. It has now been confirmed that all EU Member States have decided to opt in, which will give peace of mind to many employers with a mobile workforce.

However, it is important to note that these social security protocols are only applicable for cross border arrangements from 1 January 2021 onwards. The social security treatment for arrangements that were in place prior to this date will instead be determined by the provisions outlined in the Withdrawal Agreement previously agreed by the UK and the EU.

Key points for consideration:

  • If you are an individual working and living in either the UK or another EU member state, especially if you work in multiple locations, are you confident that you are paying into the correct jurisdiction’s social security scheme? Do you know what level of coverage you can expect?
  • If you are a business with employees working across UK / EU borders, are you certain of your social security obligations? Do you know which social security coordination rules may apply? Will you have multiple employee populations to manage due to the differing social security treatment? How does the added complexity and costs around social security compliance align with your business strategy?

At MHA MacIntyre Hudson our Human Capital Advisory team can help you navigate these issues and assist with tailoring a bespoke solution to meet the needs of your business.

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