A-Z on social security coordination (FAQs) - E
Employed person
Yes, this is possible. The concept of “activity as an employed person” within the meaning of the regulation refers to any activity or equivalent situation which is regarded under the national social security legislation of the Member State in which such activity or situation exists, as an employed activity, irrespective of the existence of an employment relationship.
In order to be considered (a person pursuing an activity as) an employed person for the purposes of the regulation, you need not be actually employed nor even come within the definition of an employee for the purposes of national labour law. It is for the Member States alone to determine who is regarded as pursuing an activity as an employed person. If a Member State decides to subject certain categories of economically inactive persons to a social security scheme for employed persons, these categories of persons could be regarded as pursuing an activity as an employed person within the meaning of the regulation.
In Member States which operate distinct, clearly-defined schemes for employed persons, it is fairly easy to determine who is pursuing an activity as an employed person for the purposes of the regulation. Other Member States, however, have general social security schemes which cover all residents or the whole working population. In those cases the notion of employed activity could be inferred from another branch of social security which operates such a distinction (e.g. accidents at work and occupational diseases).
It has to be noted that the definition of “activity as an employed person” has become less important as the personal scope of the current regulation includes all persons subject to the social security legislation of a Member State, irrespective of whether they are economically active or not. Moreover, the regulation’s chapter on unemployment benefits now also applies to self-employed persons. Nevertheless, the notion of “activity as an employed person” remains important in some respects, notably as regards the determination of the legislation applicable or the granting of family benefits.
When it comes to the rules on the determination of the legislation applicable, persons receiving cash benefits because or as a consequence of their activity as an employed person (e.g. sickness benefits, maternity benefits, unemployment benefits) are considered to be pursuing the said activity. However, this does not apply to invalidity, old-age or survivors' pensions or to pensions in respect of accidents at work or occupational diseases or to sickness benefits in cash covering treatment for an unlimited period.
In order to be considered (a person pursuing an activity as) an employed person for the purposes of the regulation, you need not be actually employed nor even come within the definition of an employee for the purposes of national labour law. It is for the Member States alone to determine who is regarded as pursuing an activity as an employed person. If a Member State decides to subject certain categories of economically inactive persons to a social security scheme for employed persons, these categories of persons could be regarded as pursuing an activity as an employed person within the meaning of the regulation.
In Member States which operate distinct, clearly-defined schemes for employed persons, it is fairly easy to determine who is pursuing an activity as an employed person for the purposes of the regulation. Other Member States, however, have general social security schemes which cover all residents or the whole working population. In those cases the notion of employed activity could be inferred from another branch of social security which operates such a distinction (e.g. accidents at work and occupational diseases).
It has to be noted that the definition of “activity as an employed person” has become less important as the personal scope of the current regulation includes all persons subject to the social security legislation of a Member State, irrespective of whether they are economically active or not. Moreover, the regulation’s chapter on unemployment benefits now also applies to self-employed persons. Nevertheless, the notion of “activity as an employed person” remains important in some respects, notably as regards the determination of the legislation applicable or the granting of family benefits.
When it comes to the rules on the determination of the legislation applicable, persons receiving cash benefits because or as a consequence of their activity as an employed person (e.g. sickness benefits, maternity benefits, unemployment benefits) are considered to be pursuing the said activity. However, this does not apply to invalidity, old-age or survivors' pensions or to pensions in respect of accidents at work or occupational diseases or to sickness benefits in cash covering treatment for an unlimited period.
If you want to read more about this topic, see for example the ECJ ruling in the case INASTI v. Claude Hervein and Hervillier SA (C-222/95)
Yes, this is possible, for the same reasons as stated in the answer to the question 25.1. The concepts of “activity as an employed” and “as a self-employed person” indeed refer to activities which are regarded as such for the purposes of the social security legislation of the Member State in which those activities are pursued. For instance, in Belgium, members of the board of directors are insured under a scheme for self-employed persons. In France, however, persons carrying out the same activity are insured under a scheme for employed persons. See also question 7.6.
Employer
In the case AFMB vs SVB, the Grand Chamber of European Court of Justice (CJEU) provided an interpretation of the notion ‘employer’.
AFMB, a company formed in Cyprus in 2011, entered into fleet management agreements with transport undertakings established in the Netherlands whereby AFMB undertook to take charge of the management of the heavy goods vehicles operated by those undertakings as part of their businesses, on behalf of and at the risk of those undertakings. AFMB also entered into employment contracts, for variable periods, with international long-distance lorry drivers residing in the Netherlands. According to the terms of those contracts, AFMB was named as the employer of those workers and Cypriot employment law was declared to be applicable. Before the conclusion of the employment contracts, the international long-distance lorry drivers concerned had never lived nor worked in Cyprus. When the contracts were performed, they continued to live in the Netherlands and worked, on behalf of those transport undertakings, in two or more Member States, and also, in the case of some, in one or more EFTA-states. Some of the drivers had previously been employees of those undertakings.
Applying the provisions of Regulation No 883/2004, the drivers were subject to the social security scheme of the country where the sole employer was vested, i.e. Cyprus, as they did not carry out a substantial part of their activities in the Netherlands. The Dutch social security authorities however did not agree and the Dutch court referred the question to the CJEU by way of Article 267 reference. They considered that the drivers were in fact employed by the Dutch companies and should therefore be subject to the Dutch social security scheme. The drivers namely received instructions from the latter company and were under its control.
The Court ruled the following:
“The interpretation of the concept of an ‘employer’ within the meaning of the Regulation is of a crucial importance for the purpose of determining the national social security legislation that is applicable to the long-distance lorry drivers in the main proceedings. It must be observed that the regulation, in order to determine the meaning of the concept, does not make any reference to national legislation or practice. It follows from the requirements of the uniform application of EU law and of the principle of equal treatment that the terms of a provision of EU law which does not contain any express reference to the law of the Member States for the purpose of determining its meaning and scope must be given an autonomous and uniform interpretation throughout the European Union, which interpretation must take into account not only the wording of that provision but also its context and the objective pursued by the legislation in question. […].
Specifically for this situation, the Court further ruled that
“an international long-distance lorry driver must be regarded as being employed, not by the undertaking with which he or she has formally concluded an employment contract, but by the transport undertaking that has actual authority over him or her, that does, in reality, bear the costs of paying his or her wages, and that has the actual power to dismiss him or her. In this case, it is clear from the information provided that the long-distance lorry drivers concerned were bound to AFMB by employment contracts in which AFMB was named as the employer of those workers and Cypriot employment law was declared to be applicable. However, it is clear that those long-distance lorry drivers, who always maintained their place of residence in the Netherlands had, before the conclusion of the employment contracts with AFMB, been chosen by the transport undertakings themselves and that they worked, after the conclusion of those contracts, on behalf of and at the risk of those transport undertakings. Further, while the fleet management agreements concluded between those transport undertakings and AFMB conferred on the latter the management of the heavy goods vehicles and while AFMB was responsible for the management of wages, it is apparent from the information provided by the referring court that, in reality, the actual cost of those wages was borne, via the commission paid to AFMB, by the transport undertakings concerned. Moreover, the transport undertakings held the actual power of dismissal.”
The court concluded that “those drivers seem to have been members of the personnel of the transport undertakings and to have had those undertakings as their employers, with the result that the social security legislation that is applicable to them seems to be the legislation of the Netherlands, which, however, is for the referring court to determine.
The employer of a long-distance lorry driver is therefore the undertaking which has actual authority over the driver, which bears, in reality, the costs of paying the wages, and which has the actual power to dismiss him or her (=the economic employer), and not the undertaking with which that long-distance lorry driver has concluded an employment contract and which is formally named in that contract as being the employer of that driver.
This case law is important, since determining who the actual employer is in case of simultaneous employment is crucial to know which legislation is applicable.
AFMB, a company formed in Cyprus in 2011, entered into fleet management agreements with transport undertakings established in the Netherlands whereby AFMB undertook to take charge of the management of the heavy goods vehicles operated by those undertakings as part of their businesses, on behalf of and at the risk of those undertakings. AFMB also entered into employment contracts, for variable periods, with international long-distance lorry drivers residing in the Netherlands. According to the terms of those contracts, AFMB was named as the employer of those workers and Cypriot employment law was declared to be applicable. Before the conclusion of the employment contracts, the international long-distance lorry drivers concerned had never lived nor worked in Cyprus. When the contracts were performed, they continued to live in the Netherlands and worked, on behalf of those transport undertakings, in two or more Member States, and also, in the case of some, in one or more EFTA-states. Some of the drivers had previously been employees of those undertakings.
Applying the provisions of Regulation No 883/2004, the drivers were subject to the social security scheme of the country where the sole employer was vested, i.e. Cyprus, as they did not carry out a substantial part of their activities in the Netherlands. The Dutch social security authorities however did not agree and the Dutch court referred the question to the CJEU by way of Article 267 reference. They considered that the drivers were in fact employed by the Dutch companies and should therefore be subject to the Dutch social security scheme. The drivers namely received instructions from the latter company and were under its control.
The Court ruled the following:
“The interpretation of the concept of an ‘employer’ within the meaning of the Regulation is of a crucial importance for the purpose of determining the national social security legislation that is applicable to the long-distance lorry drivers in the main proceedings. It must be observed that the regulation, in order to determine the meaning of the concept, does not make any reference to national legislation or practice. It follows from the requirements of the uniform application of EU law and of the principle of equal treatment that the terms of a provision of EU law which does not contain any express reference to the law of the Member States for the purpose of determining its meaning and scope must be given an autonomous and uniform interpretation throughout the European Union, which interpretation must take into account not only the wording of that provision but also its context and the objective pursued by the legislation in question. […].
Specifically for this situation, the Court further ruled that
“an international long-distance lorry driver must be regarded as being employed, not by the undertaking with which he or she has formally concluded an employment contract, but by the transport undertaking that has actual authority over him or her, that does, in reality, bear the costs of paying his or her wages, and that has the actual power to dismiss him or her. In this case, it is clear from the information provided that the long-distance lorry drivers concerned were bound to AFMB by employment contracts in which AFMB was named as the employer of those workers and Cypriot employment law was declared to be applicable. However, it is clear that those long-distance lorry drivers, who always maintained their place of residence in the Netherlands had, before the conclusion of the employment contracts with AFMB, been chosen by the transport undertakings themselves and that they worked, after the conclusion of those contracts, on behalf of and at the risk of those transport undertakings. Further, while the fleet management agreements concluded between those transport undertakings and AFMB conferred on the latter the management of the heavy goods vehicles and while AFMB was responsible for the management of wages, it is apparent from the information provided by the referring court that, in reality, the actual cost of those wages was borne, via the commission paid to AFMB, by the transport undertakings concerned. Moreover, the transport undertakings held the actual power of dismissal.”
The court concluded that “those drivers seem to have been members of the personnel of the transport undertakings and to have had those undertakings as their employers, with the result that the social security legislation that is applicable to them seems to be the legislation of the Netherlands, which, however, is for the referring court to determine.
The employer of a long-distance lorry driver is therefore the undertaking which has actual authority over the driver, which bears, in reality, the costs of paying the wages, and which has the actual power to dismiss him or her (=the economic employer), and not the undertaking with which that long-distance lorry driver has concluded an employment contract and which is formally named in that contract as being the employer of that driver.
This case law is important, since determining who the actual employer is in case of simultaneous employment is crucial to know which legislation is applicable.
Electronic exchange of social security information (EESSI)
One of the main innovations introduced by the current social security coordination regulations is the obligation for Member States to exchange social security information only by electronic means. To this end, an integrated system providing a common secure framework is set up. EESSI (Electronic Exchange of Social Security Information) is a communication (messaging) system that allows national social security institutions to exchange in a secure manner social security information concerning persons covered by the regulations. The information is exchanged via structured electronic documents, replacing the paper E-forms used under the former regulations.
The EESSI system consists of
- the Central Service Node (CSN) - a central system hosted by the European Commission with the master repositories of data used by EESSI actors to handle correctly the exchange of messages (such as the identification of the correct institution, validation of messages, authentication and authorisation of Access Point (AP) to AP communication etc.). Another role of the CSN is to provide central reporting and statistics on EESSI message exchange. There are two EESSI repositories hosted in the CSN:
- the Institution Repository of relevant data about the connected Competent Institutions within EESSI, necessary for the exchange of messages;
- the Common Data Model Repository of structured forms and patterns used in the communication of the social security information, also known as Structured Electronic Documents and Business Use Cases, respectively;
- the Access Points of the 32 participating European Countries (27 EU Member States plus Iceland, Lichtenstein, Norway, Switzerland and United Kingdom), interconnected via a secure network, which ensures the exchange of all electronic information between countries;
- a national application that can either be a stand-alone application, called RINA, deployed in different institutions, or the existing institution’s application which has been developed to include the functionalities to handle cross-border cases.
The EESSI represents therefore the common EU infrastructure, which is developed at EU level to ensure the exchange of information between the institutions located in different countries, through the Access Points. The Member States are responsible for taking the necessary steps (at technical and institutional level) to connect to the whole system and to ensure the management and transmission of data from their national social security institutions.
The centrally developed parts of the EESSI system were made available by the Commission in July 2017. Following this date, the participating countries had two years to finalise their national implementation of EESSI and to connect their social security institutions to the cross-border electronic exchanges. The first exchanges started in January 2019 and EESSI is expected to be fully implemented by 2021.
The EESSI implementation requires significant national integration effort to connect the national applications of the 32 Participating Countries (the 27 EU Member States plus Iceland, Liechtenstein, Norway, Switzerland and the United Kingdom) to the EESSI system – and to ensure that the institutions and clerks are ready to start the electronic exchanges.
Once two Participating Countries are ‘EESSI ready’ for a business process (there are 99 of them), the exchange of information between them shall be under EESSI for all exchanges covered by this business process.
The first exchange within the EESSI system happened between Austria and Slovenia, in January 2019. In January 2020, all Participating Countries were in production and able to exchanges for at least one business process.
In March 2021, there had been more than 2.4 million cases exchanged between about 2.600 European institutions. It is foreseen that all Participating Countries will be fully operational by June 2022.
See also the keywords portable documents and structured electronic documents.
Equal treatment of benefits, income, facts or events
Legal basis: article 5 Regulation 883/2004
See the keyword assimilation of facts.
EU-UK relations - Protocol on SSC
The EU–UK Trade and Co-operation Agreement (TCA) was agreed on 24 December 2020 and has been applied since 1 January 2021. It includes a Protocol on Social Security Coordination, which is the most comprehensive agreement in this area which the EU has concluded with any third country. It applies to persons who legally reside in a Member State or the UK if they move between the EU and the UK after the end of the transition period on 31 December 2020.
To a large extent, the Protocol mirrors the provisions on social security coordination in the relevant EU Regulations. For instance, old-age pensions are coordinated between the UK and the Member States in the same way as when the UK was an EU Member State. Moreover, persons insured in the EU can use their European Health Insurance Card during temporary stays in the UK to access necessary healthcare.
However, taking into account the changed context and the end of free movement between the EU and the UK, coordination is slightly more restricted than previously. Certain branches of social security, such as family benefits, long-term care benefits and special non-contributory cash benefits are not coordinated by the Protocol. For others, such as unemployment benefits and invalidity benefits, coordination is more limited than within the EU and only concerns the aggregation of periods.
The Protocol does not grant any rights to reside or work in the EU or the UK respectively. However, persons who fulfil the national requirements and are granted a residence right and/or labour market access can rely on it for the coordination of their social security rights. It applies without prejudice to the EU-UK Withdrawal Agreement and does not cover situations involving Iceland, Liechtenstein, Norway or Switzerland..
To a large extent, the Protocol mirrors the provisions on social security coordination in the relevant EU Regulations. For instance, old-age pensions are coordinated between the UK and the Member States in the same way as when the UK was an EU Member State. Moreover, persons insured in the EU can use their European Health Insurance Card during temporary stays in the UK to access necessary healthcare.
However, taking into account the changed context and the end of free movement between the EU and the UK, coordination is slightly more restricted than previously. Certain branches of social security, such as family benefits, long-term care benefits and special non-contributory cash benefits are not coordinated by the Protocol. For others, such as unemployment benefits and invalidity benefits, coordination is more limited than within the EU and only concerns the aggregation of periods.
The Protocol does not grant any rights to reside or work in the EU or the UK respectively. However, persons who fulfil the national requirements and are granted a residence right and/or labour market access can rely on it for the coordination of their social security rights. It applies without prejudice to the EU-UK Withdrawal Agreement and does not cover situations involving Iceland, Liechtenstein, Norway or Switzerland..
Export of benefits
As a rule, you will not lose the right to benefits, nor will the benefits be suspended, reduced or otherwise modified. According to the principle of exportability (or waiving of residence clauses), which is one of the general principles of social security coordination, you are entitled to have your benefit paid in the Member State to which you move. The Member State which grants the benefit may not require you to reside on its territory as a condition for payment or for entitlement to the benefit.
However, not all cash benefits falling within the scope of the coordination regulation are exportable. The principle of exportability does not extend to special non-contributory cash benefits. These benefits are in principle only payable in the territory of the Member State where you reside and under the legislation of that State (see the keyword special non-contributory cash benefit).
Likewise, unemployment benefits are in principle not exportable. The right to unemployment benefits is subject to the condition that you have to remain available to the employment market in the State where benefits are paid. In other words, you have to reside there. However, there is an exception to this exception, in the form of a conditional exportability, limited in time to 3 months (extendable by the competent institutions or services to 6 months) (see the keyword unemployment benefits, questions 69.3 to 69.7).
However, not all cash benefits falling within the scope of the coordination regulation are exportable. The principle of exportability does not extend to special non-contributory cash benefits. These benefits are in principle only payable in the territory of the Member State where you reside and under the legislation of that State (see the keyword special non-contributory cash benefit).
Likewise, unemployment benefits are in principle not exportable. The right to unemployment benefits is subject to the condition that you have to remain available to the employment market in the State where benefits are paid. In other words, you have to reside there. However, there is an exception to this exception, in the form of a conditional exportability, limited in time to 3 months (extendable by the competent institutions or services to 6 months) (see the keyword unemployment benefits, questions 69.3 to 69.7).
ESPASS - European Social Security Pass
A pilot project on the European Social Security Pass was commenced in March 2021 to explore the feasibility of a digital solution to simplify the interaction between mobile citizens and national authorities by facilitating the cross-border verification of social security coverage and entitlements. This would improve the portability of social security rights across borders while helping reduce the risk of errors and fraud.
More information about the European Social Security Pass can be found here.
More information about the European Social Security Pass can be found here.