European Union employees, who seek employment in another EU country, often underestimate the complexity of the EU social security system. Once you change the country of your residence, temporarily (even for five days) or forever, you and your dependents can only be covered by one social insurance system. However, the system of which country will it be?

If you would like to learn more about your social security rights when seeking employment in another EU country, then you can apply for a no-cost “Social Security Check” session with our specialists during which consultation you will be given information on how to protect your and your family’s social security rights.

To book our free “Social Security Check”session, send an email at info@acginter.com or call us at +31-20-8006400.

What you as an EU employee should absolutely know before you seek employment in another EU country

When seeking employment in another EU country very few individuals look into the Social security system regulations. This results in employees not knowing that their social security rights such as employment benefits, health cover, family allowances, disability or old-age will be fully dependent on the legislation of either their home country or the host country.

Lack of knowledge of your rights can lead to you paying contributions to the wrong state, or even multiple states. As a result, you will not be able to recover unduly paid benefits, as it cases a huge administrative burden and is often very hard or even impossible.

To prevent this from happening, ACG International has prepared a brief guide for you on how to accurately evaluate which legislation will determine your future when you are employed in another EU state.

There are four most common employment scenarios within the EU. Determining which applies to your situation helps you understand which legislation you fall under.

1. Living and working abroad

You fall under this category if you had moved to another EU country and are actively seeking employment there. According to the Treaty on the Functioning of the European Union (TFEU) you have a right to freely move within the EU, Iceland, Liechtenstein, Norway, or Switzerland. You are entitled to stay in the host country as long as you have a “genuine chance” of finding a job.

What legislation will apply to you?
If you have moved to another country and started a job you are subject to the legislation of the host state (the same applies in case you are self-employed there). Therefore, it is important to register with the social security system in the host country as the benefits related to sickness, family, unemployment, pensions, occupational accidents and diseases, early retirement and death will be determined by the local laws. If you are, however, unemployed you can carry on receiving unemployment benefits from the country where you were last working for a limited amount of time.

Let’s look at the example of a typical problem when you work abroad.
X has lived and worked in the Netherlands for 4 years before moving to Spain. She had worked in Spain for 2 years when she had a terrible accident that left her unable to work. X applied for unemployment benefits in Spain, however, the authorities dismissed her application stating that she has worked for less than statutorily required period before applying for the benefits. X did not do anything and did not receive unemployment benefits. Here, the authorities were wrong in calculating X’s working years, as they should have included the time she had worked in the Netherlands. If X had consulted with an attorney, she would know that every period of work in the EU counts for benefits.

2. Posted abroad on a short assignment (less than 2 years)

You are a “posted worker” if your employer temporarily sent you to work in another EU country. This implies that you remain in the host country only on a temporary basis and do not integrate within its labor market. The maximum duration of your stay cannot exceed 24 months. In some exceptional cases, your employer may request the extension of posting in case the planned work has not been completed yet.

What legislation will apply to you?
As a posted worker you do not fall under the legislation of the host state, but rather continue to be subject to the legislation of the state of residence, provided that your employer supplies you with the properly filed A1 form. Therefore, your social security rights such as employment benefits, health cover, family allowances, disability or old-age pension etc. will not be impacted by the legislation of the host state.

Let’s look at the example of a typical problem for the employee.
Before sending T to a host country, the employer provided him with an A1 form. The host country’s authorities claimed that the form was invalid, and therefore, that T has to pay contributions to the host country. T ended up paying contributions to both countries. However, this situation could have been easily avoided if T or his employer were informed of the fact that only the country of T’s origin can recognize the validity of the A1 form meaning that T did not have to pay contributions to the host country. A well written objection to the host country’s authorities could have saved T from paying contributions to both countries. It is therefore our advice to contact a specialist if a similar situation applies to you. This is not up to the host authorities to decide whether the A1 form is valid or not. Only the country of T’s origin can recognize the form as valid and consequently T does not need to pay contributions to the host country.

3. Working in one country, while living in another (frontier worker)

If you fall under this category of employees, you are considered a “frontier worker”. This is a person who is employed or self-employed in one EU state, but resides in another country. An important distinguishing feature is that you must return to your country of residence at least once a week to be considered a frontier worker. Frontier workers differ from migrant workers, who move from their country of origin in order to live and work in a different country, and therefore, they have a dual national allegiance, divided by the countries a worker lives and works in.

What legislation will apply to you?
In this case you will be insured in the country of your employment. Special rules will apply to healthcare and unemployment: you have a right to obtain the healthcare benefits in either country, while unemployment benefits can be claimed only in the country of residence. However, if you have never worked in the country you live in, you might not build up any pension, and thus, will not receive the benefits. It is therefore important to check whether you are eligible to these benefits in your country of residence because otherwise you might not be receiving any benefits.

Our specialists can quickly and cost-effectively provide you with advise on how to proceed.

Let’s look at the example of a typical problem for the employee.
P has moved to Croatia from the Netherlands to start a job. Since moving, he has paid his contributions in Croatia. Nevertheless, the Dutch authorities demanded P to pay contributions in the Netherlands. In this case, the Dutch authorities’ claim is unfounded. Due to lack of knowledge, P ended up paying contributions to both countries, when the rule is that the frontier workers are required to pay contributions only in the country where they work. If P had consulted a specialist this double contribution could have been avoided. In case you are experiencing the same issues as P contact our specialists to find out how we can help you prevent double contribution.

4. Working in more than one country

To fall under this definition, you have to carry out your activities simultaneously or in alternation under the same or different employment contract in two or more EU countries. This does not necessarily have to be two full-time positions; the second activity can be work during the weekend or a part-time job. For example, a manager in one state falls under this definition if he/she works as a taxi driver in a different state over the weekend. In addition, to determine if you fall under this category, you should take into account the foreseeable activities. You will be treated as working in two or more EU countries only if there are indications that there is a repetitive working pattern for the next 12 months. Therefore, if your job is only seasonal employment, or if there are intermittent periods between your jobs, these rules might not apply to you.

What legislation will apply to you?
In order to determine which social security system applies to you, it is necessary to identify where do you perform a substantial part of your activity. A “substantial part” of the activities means at least 25% of working time and/or renumeration.

Let’s look at the example of such situation.
S lives in the Netherlands while his employer is based in Belgium. S works two days a week in the Netherlands and three days in Belgium. As two working days out of five equal 40% of S’s working time, he performs a substantial part of his activity Netherlands. Therefore Dutch legislation is applicable.
However, if the substantial activity in the country of your residence is less than 25%, other rules will apply.

For example, if an employee:
• has no substantial activity in his country of residence, the employee is covered by the legislation of the country where the employer’s head office is located;
• works for two employers with head offices in different countries, one in his country of residence and one outside his country of residence but has no substantial activity in his country of residence, the employee is covered by the legislation of the country where the employer’s head office is located outside his country of residence;
• works for two employers with head offices in different countries outside his country of residence but has no substantial activity in his country of residence, the employee is covered by the legislation of his country of residence;
• is self-employed and has no substantial activity in his country of residence, the employee is covered by the legislation of the country where the center of interest of his activities is located;
• is employed in one country and is self-employed in another, the employee is covered by the legislation of his country of employment.

What can ACG International do for you?

As you can see from the aforementioned, knowing your social security rights will preclude you from highly undesirable situations as paying contributions to the wrong country, or paying twice more than you should. Most importantly, not knowing your rights can lead to a complete loss of your unemployment- and other benefits, as sometimes, the transfer of your benefits from a one EU country to another EU country is impossible, due to national law restrictions.

Hypothetical problems described above could have been easily avoided, had employees consulted with a specialist. In order to prevent such problems from arising, book a 15 minute no-cost “Social Security Check” Session with our specialists.

In this 15 minute telephone session you will be advised on how to:
– Identify the risks that you are facing when working in another EU country;
– Determine whether you have been properly paying contributions to either one of the countries;
– Uncover hidden challenges which may impact your future unemployment- and other benefits;
– Understand the action you need to take to overcome the risks.

Take advantage of our free 15 minutes consultation to protect your and your family’s social security rights.

To book our free “Social Security Check”session, send an email at info@acginter.com or call us at +31-20-8006400.