After the General Election on 12 December 2019, the Withdrawal Agreement may never be ratified. A new UK Government with a working majority in Parliament could take a different course. But on the basis that it does become law, what provision does it make for those who currently benefit from the co-ordination of social security, healthcare and pension entitlements in Regulation 883/2004?

The way in which the co-ordination  system works has been set out in my earlier blog post ‘Pensions, Healthcare and Social Security for EU Citizens after Brexit: the forgotten aspect of Free Movement’. This post builds on that one. The co-ordination system is the nervous system of labour mobility in the European region. It enables self-employed and employed EU Citizens and lawfully-resident non-EU Citizens, to move from one EU state to another for work.

The Withdrawal Agreement makes provision for the co-ordination of social security systems in Part Two, Title III. According to the European Commission ‘The persons concerned will maintain their right to healthcare, pensions and other social security benefits, and if they are entitled to a cash benefit from one country, they will in principle be entitled to receive it, even if they decide to live in another country’. But what has been done in practice and in what respect could more be done? Are workers and employees in multinational companies protected in all respects, when they have been employed in another EU state and are transferred to the UK? Is the position of the self-employed journalist protected when she has been in and out of work in her home state and the now the UK?

The first point to note is that the legal language used is different to that used for free movement and migration provisions. Many terms and concepts are borrowed from the co-ordination Regulation (883/2004) and do not simply replicate the language of the free movement directive for EU Citizens (2004/38/EC). Care is needed when reading the Withdrawal Agreement’s provisions.

Who is included? (Article 30)

More people are covered than you might expect. Further, inclusion is not simply about a person’s status but about whether they have been insured (subject to social security legislation) in the state in question. The people who are covered are, firstly, EU Citizens who are insured under UK  legislation at the end of the transition period (31 December 2020), as well as their family members and survivors, and, further,  UK nationals who are insured under the legislation of another EU state at the end of the transition period (31 December 2020), as well as their family members and survivors. A person may be insured by virtue of satisfying the criteria contained in the legislation of the country in question. The above criteria are not tied to being resident in any particular country.

In addition, EU Citizens who reside in the UK but who are insured under the legislation of another EU state at the end of the transition period (31 December 2020) are also covered, as are their family members and survivors. Correspondingly, UK nationals who reside in another EU state and who are insured under UK legislation at the end of the transition period (31 December 2020) are also covered, as are their family members and survivors.

Now it starts to get complicated. Also covered are EU Citizens (not otherwise covered above) who pursue an activity as self-employed or employed in the UK at the end of the transition period (31 December 2020) and who under Title II of Regulation 883/2004 are insured under the legislation of another EU state at the end of the transition period (31 December 2020), as well as their family members and survivors. Correspondingly, also covered are UK nationals (not otherwise covered above) but who pursue an activity as self-employed or employed in another EU state at the end of the transition period (31 December 2020) and who under Title II of Regulation 883/2004 are insured under UK legislation at the end of the transition period (31 December 2020), as well as their family members and survivors. Who are these people? Ordinarily, if you work in one EU state, you would be insured under that state’s legislation. But not always. For example, special rules apply where you are posted from state A to state B and work not more than 24 months in state B. In that case, the person remains insured in state A while working in state B. There are other exceptions. For example, where a person works in two or more EU states. Title II of Regulation 883/2004 contains the exceptions.

In addition, also covered are people who have not exercised rights of free movement provisions EU Citizens or their family members. Stateless Persons and Refugees residing in the UK or another EU state and who are in any of the situations described above are also covered, as are their family members and survivors.

Further, also covered are other people who are nationals of non-EU countries (often referred to as third-country nationals), as well as their family members and survivors, provided they satisfy the conditions of Regulation 859/2003 (which extends co-ordination provisions to certain third country nationals, essentially those working). However, some third country nationals fall outside Regulation 859/2003 (for example where not working) and so are excluded. This is so even though the EU applies Regulation 1231/110 to extend the scope of co-ordination provisions in other EU states to certain economically inactive third country nationals not otherwise covered. The UK has never applied Regulation 1231/10, relying instead on the previous Regulation applicable to third country nationals: 859/2003. The Withdrawal Agreement reflects that position. This is a great pity. Regulation 1231/10 extends covet to third country nationals who are legally resident and who are not working but in a cross-border situation. Were it to be applicable (which it is not), an American, legally resident in the UK, could use an UK-issued European Health Insurance Card (EHIC) card when on vacation in Italy.

On a more general point: all the persons listed above are only covered under the Withdrawal Agreement so long as they continue to be in one of the situations set out above involving boththe UK and another EU state at the same time. Thus, it is possible to fall outside of the cover offered. What happens then?

There is a saving provision: any person who does not or who no longer falls within the provisions set out above, but who falls within Article 10 of the Withdrawal Agreement is also covered (as are their family members and survivors). Article 10 refers to the categories of persons who continue to have rights of residence under the Withdrawal Agreement (that is it defines the personal scope of who is included). Is the provision that replicates many of the free movement migration provisions found in Directive 2004/38/EC for EU Citizens and their family members. It is a lengthy provision and its twists and turns may bring a person within scope, where not otherwise covered. It does not extend to Stateless Persons, Refugees, and third country nationals who are not family members of EU Citizens.

 

As generous as It is, in the UK this saving provision by reference to Article 10 of the Withdrawal Agreement presents a problem. As is well known, the UK’s Settled Status scheme (found in Appendix EU to the UK’s Immigration Rules) is broader in scope than the provisions of the Withdrawal Agreement in the granting of Settled Status to EU Citizens and their family members. For example, a person who has been economically inactive for five years does not have to show that she held comprehensive sickness insurance in that period in order to qualify for Settled Status. But where does this generosity leave a person who seeks to rely on Article 10 for co-ordination of social security purposes?

 

On the face of it, such a person will still have to show that she held comprehensive sickness insurance during any periods she seeks to argue that she was in the UK as a self-sufficient person if she wants to secure rights relating to the co-ordination of social security, healthcare, and pensions. Furthermore, the UK may not, unilaterally, be able to say that such a person falls within scope of the Withdrawal Agreement for social security purposes, as such an assertion may trigger obligations on or disputes with other states also involved in the co-ordination of her rights (not least where there is a cross-border obligations on account of residence or activity in more than one state. Thus, without more, a person with UK Settled Status based merely on five years’ presence may still be excluded from social security co-ordination provisions under the Withdrawal Agreement unless she can show prior exercise of EU rights.

There is also another point to note: the persons who fall within Article 10 of the Withdrawal Agreement are only covered for so long as they have a right to reside under Article 13 (residence rights) of the Withdrawal Agreement or a right to work in their state of work under Article 24 (rights of workers) or Article 25 (right of self-employed persons) of the Withdrawal Agreement. This re-enforces the point identified above, that a person with UK Settled Status based merely on five years’ presence may still be excluded from social security co-ordination provisions under the Withdrawal Agreement unless she can show prior exercise of EU rights.

Finally, where family members and survivors are referred to, they are only covered under the Withdrawal Agreement only to the extent they derive rights and obligations in such a capacity under Regulation 883/2004.

It is fair to say that the Citizens’ Rights provisions of the Withdrawal Agreement are incomprehensible without a working knowledge of Directive 2004/38/EC and Regulation 883/2004.

For persons within scope: what is the extent of social security, healthcare and pension rights? (Article 31)

Here matters simplify a little. All the persons who fall within the scope of the provisions set out above get the benefit of the rules and objectives set out in Regulation 883/2004, its implementing Regulations and its governing EU treaty provision (Article 48 of the Treaty on the Functioning of the European Union). In other words, the full co-ordination rules apply and so there is protection for social security, healthcare, and pensions. This is good stuff, simple and straightforward.

However, a wrinkle is introduced: the UK and the EU are only obliged to take due accountof the Decisions and Recommendations of the Administrative Commission on Social Security that interprets difficult provisions of Regulation 883/2004 (the main co-ordination Regulation). Where two parties are only obliged to take due regard of a decision, they may differ as to its meaning and effect. Thus, there is scope for divergence in approach. It may happen; it may not. But it is possible and a pitfall that might otherwise have been avoided.

As regards co—ordination of social security, healthcare, and pensions under the Withdrawal Agreement provision is made to apply the definitions found in Regulation 883/2004 to the co-ordination measures of the Withdrawal Agreement. In this way the definition of ‘family members’ is broadened to include for example ‘any person defined or recognised as a member of the family or designated as a member of the household by the legis­lation [of the state in question] under which benefits are provided’ Depending on the legislation of the state in question, additional classes of persons may be family members and thus within the scope of these provisions.

What happens if you are not are no longer within the personal scope of the Withdrawal Agreement? (Article 32)

Having established who is covered by the co-ordination provisions of the Withdrawal Agreement and how the rules of Regulation 883/2004 are to be applied, the Withdrawal Agreement makes provision is made for special situations. These rules relate to people who are not or who are no longercovered by the co-ordination provisions of the Withdrawal Agreement.

For the purposes of reliance on and adding together (aggregating) periods of insurance, employment, self-employment, or residence (and the attendant rights and obligations), the following persons are nonetheless covered, even though they fall outside the personal scope set out above:  EU Citizens (from other EU states) Stateless Persons, and Refugees residing in an EU state, as well as qualifying third country nationals (see above), who have been insured under UK legislation before the end of the transition period (31 December 2020), as well as their family members and survivors. Also covered are UK nationals, Stateless Persons, and Refugees residing in the UK, as well as qualifying third country nationals (see above), who have been insured under the legislation of another EU state before the end of the transition period (31 December 2020), as well as their family members and survivors. Moreover, for the purpose of adding up periods, time spent before and after the end of the transition period (31 December 2020) must be taken into account. Such persons who are receiving benefits under this provision also benefit from the provision made under Regulation 883/2004 as regards sickness in kind, for example hospital care.

Moreover, as regards planned healthcare treatment under the Regulation (where resident in one state and seeking treatment in another), where a request for prior authorisation has been made before the end of the transition period (31 December 2020), the rules regarding such treatment will continue to apply until the end of the treatment, and reimbursement procedures continue to operate even after the treatment has been completed. Notably, this provision gives such persons (and those accompanying them) a right to enter and exit the state where treatment is received.  Thus, it contains an immigration right.

As regards  a person receiving medical treatment Regulation as a person ‘staying’ in the UK or an EU state  at the end of the transition period (31 December 2020), where insured in the other place (the EU or the UK as the case may be), the rules  regarding such treatment will continue to apply until the end of the treatment, and reimbursement procedures continue to operate even after the treatment has been completed.

There are also special rules as regards family benefits, such as child benefit. The rules applying to such benefits under Regulation 883/2004, whereby they are paid by one state to a person whose children reside in another state continue to apply butonly for so long as the conditions of entitlement are fulfilled. If there is an interruption in entitlement, the rules cannot be relied upon once a person resumes compliance with the conditions (remember we are talking about persons who are not otherwise within the scope of the Withdrawal Agreement. The special rules apply to awards of family benefits to which a person has an entitlement at the end of the transition period (31 December 2020). The beneficiaries of this particular protection are EU Citizens (from other EU states) Stateless Persons, and Refugees residing in an EU state, as well as qualifying third country nationals (see above), who are insured under the legislation of an EU state but who have family members residing in the UK at the end of the transition period (31 December 2020). Also covered are UK nationals, Stateless Persons, and Refugees residing in the UK, as well as qualifying third country nationals (see above), who are insured under UK legislation but who have family members residing in an EU state at the end of the transition period (31 December 2020). As regards these persons, for any of them who have rights as family members (recall the broad definition of family members that applies) under Regulation 883/2004 at the end of the transition period (31 December 2020), such as a derived benefit for sickness benefits in kind (e.g. hospital care), the Regulation (and its implementing Regulation)  continues to apply for as long as its  conditions are fulfilled. Finally, it is notable that the Withdrawal Agreement’s provision of payment of benefits in respect of children resident in another state, applies Articles 67, 68 and 60 of Regulation 883/2004 but not Article 68a, where the latter makes provision for payments direct to the person maintaining the family.

The European Economic Area and Switzerland (Article 33)

Thereafter, provision is made to apply the Withdrawal Agreement provisions  on co-ordination to nationals of Iceland, Norway, Liechtenstein (i.e. the EEA states) and Switzerland, provided that those countries have concluded and apply corresponding agreements with the UK that apply to EU Citizens; and have concluded  and apply corresponding agreements with the EU that apply to UK nationals.

Administrative Cooperation (Article 34)

The UK is to have only observer status un the Administrative Commission that supervises the co-ordination of social security. Where co-ordination under the Withdrawal Agreement is on the agenda, the UK may send a representative in an advisory capacity.

However, the UK is to take part in the Electronic Exchange of Social Security Information (EESSI) and bear the related costs.

Reimbursement, recovery, and offsetting (Article 35)

Provision is made for reimbursement, recovery and offsetting as between EU states and the UK.  In the particular circumstances where a person is no longer within the personal scope of the Withdrawal Agreement (article 30) (see above), those provisions will apply in relation to events that occurred before the end of the transition period (31 December 2020), or which occurred after the end of the transition period but relate to persons who were within the personal scope of the Withdrawal Agreement (articles 30 and 32) when the event occurred.

The Development of the Law (Article 36)

What happens if the co-ordination Regulation 883/2004 (and its implementing Regulation 987/2009) are amended or replaced by the EU after the end of the transition period (31 December 2020)? In such circumstances, references in the Withdrawal Agreement to the current Regulations, are to be read as references to the amended or replaced versions.  Where the Regulations are amended or replaced, the Joint Committee (UK-EU) would amend the relevant Annex to the Withdrawal Agreement to make sure it operated on the basis of the correct and relevant Regulations.

However, in certain circumstances the Joint Committee may act differently and  assess the effects of an act amending or repealing the Regulations. It will do so where the subject matter of the co-ordination Regulation (i.e. sickness benefits, maternity benefits, invalidity benefits, etc.) is amended or replaced. It will also so where there is a change to whether a cash benefit is exportable or non-exportable (some benefits such as certain disability benefits are exportable: paid by one state to a person who has moved to live in another state)  as compared to the position at the end of the transition period (31 December 2020). It will also do so where there is a change in whether or not a cash benefit is exportable  for a limited or unlimited time as compared to the position at the end of the transition period (31 December 2020). The Joint Committee is charged with considering the scale of the changes in good faith and the importance of the continued good functioning of the Regulations as between the UK and the EU, as well the importance of there being a competent state (where the state institution with which the person is insured is located) in relation to person covered by the Regulation. On the matters for which special provision is made, within 6 months of being notified of the changes, the Joint Committee may notalign the Withdrawal Agreement with the amended or replaced Regulations and so persons insured in the UK or present in the UK may be disadvantaged. Thus, regrettably, there is scope for divergence as between the UK and the EU.

Provision is also made for adaptations and changes to UK social security provision to be assimilated into Regulation 883/2004 (and its implementing Regulation), where specified in an Annex to the Withdrawal Agreement, and for notification of future changes. Conversely, Decisions and Recommendations of the EU’s Administrative Commission on Social Security that are specified in the Withdrawal Agreement are made part of it, and the Joint Committee must amend the list to include any new Decision or Recommendation adopted.

 Conclusion

While there is much to welcome in the co-ordination of social security, healthcare, and pensions provisions of the Withdrawal Agreement, there are also pitfalls to be avoided. The area is very complex and hard to follow. What matters is vigilance to ensure that the UK and other EU states keep their commitments.