Agreement between the EU and the UK – how social security and insurance will be co-ordinated in future

On 30 December 2020, the European Commission and the UK signed a new co-operation agreement concerning their relations. The agreement is being applied provisionally as of 1 January 2021 in order to avoid a no-deal exit situation. The agreement will be ratified once the European Parliament gives its consent to the agreement and the Council adopts the decision.

The new agreement defines how social security will be co-ordinated between the EU countries and the UK in new situations beginning on 1 January 2021 or thereafter in which an individual transfers from the EU area to the UK or vice versa. The agreement’s provisions concerning the applicable social security legislation largely correspond to the provisions of the EU’s social security regulations.

According to the new agreement:

  • Individuals are covered by the social security of only one state at a time.
  • Individuals are generally insured in the country in which they work.
  • The general rule of insurance in the country of employment is subject to the same exceptions as those in the EU’s social security regulations (e.g. the posting of workers and entrepreneurs and working in two or more states).
  • Application of the rule concerning posted workers and entrepreneurs requires that the member state reports its intention to apply this exception.
  • The agreement provisions concerning pensions are similar to the provisions of the EU’s social security regulation on the payment, application and determination of pensions.

The exit deal secures the continuity of the rights of persons who were in a cross-border situation between the EU and the UK when the transitional period ended on 31 December 2020.

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