The co-ordination of social security, pensions, and healthcare provision for people who move among EU States is one of the great of achievements of EU free movement law. It is an EU-wide system for taking national insurance contributions paid in one or more EU States and turning them into entitlements to pensions, healthcare, and social security in the country in which the EU Citizen resides, see my Blog Post Pensions, Healthcare and Social Security for EU Citizens after Brexit: the forgotten aspect of Free Movement.
The UK’s departure from the EU on 31 January 2020 has led to confusion as to the applicable law for those protected by the EU-UK Withdrawal Agreement and for those who move between the EU and the UK (or vice versa) for the first time after the end for the transition period (31 December 2020). How has this confusion come about and what form does it take? The law is obscure, unnecessarily so. What follows is an attempt to untangle it.
The co-ordination of social security, pensions, and healthcare provision arises under EU Regulation 883/2004 and its implementing Regulation 987/2009 (‘the Co-ordinating Regulations’). These regulations are directly applicable in the law of EU Member States without the need for transposition into domestic law. Hitherto, the UK has applied these Regulations and they have formed part of UK law. What changes have been wrought by Brexit?
The European Union (Withdrawal) Act 2018
In anticipation of the UK’s departure from the EU and to provide for that departure in domestic law Parliament passed the European Union (Withdrawal) Act 2018 (‘the 2018 Act’). By section 3 of that Act (as amended), directly applicable EU law operative immediately before the end of the transition period (31 December 2020), such as the Co-ordinating Regulations is made part of domestic UK law. However, Parliament also made provision for such retained EU law to be amended. Section 8(1) of the 2018 Act provides:
8 (1) A Minister of the Crown may by regulations make such provision as the Minister considers appropriate to prevent, remedy or mitigate—
(a) any failure of retained EU law to operate effectively, or
(b) any other deficiency in retained EU law,
arising from the withdrawal of the United Kingdom from the EU.
Deficiencies in retained EU law are those where the Minister considers that retained EU law does one of a number of things specified in section 8(2) of the 2018 Act. Notoriously, the power to amend is very widely drawn in section 8(2). Further, it includes the power to amend an Act of Parliament by regulations (known colloquially as a Henry VIII power). The scope to make regulations is further supplemented by section 22 and Schedule 7 of the Act.
As regards the Co-ordinating Regulations as retained EU law under the 2018 Act, the Secretary of State has exercised his power to amend them in the Social Security Coordination (Regulation (EC) No 883/2004, EEA Agreement and Swiss Agreement (Amendment) (EU Exit) Regulations 2019 (‘the 2019 Regulations’). What changes do these Regulations make?
The 2019 Regulations: the Road to Discrimination
Among other things the 2019 Regulations remove the equal treatment provision made in the Co-ordinating Regulations (as retained EU law). They do so by removing Article 4 of Regulations, which provides:
Equality of treatment
Unless otherwise provided for by this Regulation, persons to whom this Regulation applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof.
Thus, at a stroke, the provision for non-discrimination on grounds of nationality (as between EU Citizens and nationals of the host state (i.e. the UK) is removed. Removal of the protection is significant. Henceforth, more generous provision may be made for say a British Citizen working in a bank or as a self-employed journalist as compared to a German banker or a self-employed Italian journalist. Adverse discrimination results.
Moreover, in disputes as to rights under the Co-ordinating Regulations, the Court of Justice of the European Union (‘CJEU’) has relied upon this prohibition on non-discrimination on grounds of nationality (and its antecedent in previous legislation) to uphold the rights of mobile EU Citizens moving between states, see for example Chateignier Case C-346/05). The protection has also been mobilised in cases before UK courts, see for example Secretary of State for Work and Pensions v Bobezes  EWCA Civ 111, Court of Appeal, and SF v Secretary of State for Work and Pensions and HMRC (HRP)  UKUT 175 (AAC), Upper Tribunal. It is arguable that the removal of this provision from the Co-ordinating Regulations by making use of the power to make regulations in section 8 of the 2018 Act is unlawful, Article 4 of Regulation 883/2004 (as retained EU law does neither impede the effective operation of retained EU law, nor constitute a deficiency or similar, such the law may be amended. In other words, it is arguable that there is no lawful power to remove it and that the use of power is ultra vires (as lawyers say).
However, assuming the change was made lawfully, when does it come into force and who does it affect? According to regulation 1 of the 2019 Regulations it comes into force on ‘exit day’, that is on the day the UK left the EU (i.e. on 31 January 2020). However, that must be read subject to paragraph 1 of Schedule 5 of the European Union (Withdrawal Agreement) Act 2020 (‘the 2020 Act’) that converts such references to exit day to references to the end of the transition (implementation) period: 31 December 2020. Thus, the change has yet to take effect. The shift in date is consistent with other provisions of the 2020 Act (sections 1-4) that provide for EU law to continue as part of UK law during the transition period. That leaves second question to be answered: Who then will the removal of the equal treatment provision affect?
The EU-UK Withdrawal Agreement Beneficiaries
Everyone who falls within the personal scope of the EU-UK Withdrawal Agreement as regards the co-ordination of social security, healthcare and pensions continues to benefit from the EU Co-ordination regulations, see my blog post The Withdrawal Agreement: Social Security, Healthcare and Pensions after Brexit and so the UK’s removal of the equal treatment from its retained EU law by the 2019 Regulations cannot affect them. The supremacy of rights protected under the Withdrawal Agreement over other parts of UK law is confirmed by the provision made in section 5 of the 2020 Act, interpolating section 7A into the 2018 Act so as to secure Withdrawal Agreement rights in domestic law. Moreover,t that protection is buttressed by section 13 of the 2020 Act, which confers a power to make regulations in respect of social security co-ordination rights protected by the Withdrawal Agreement, see my blog post, Social Security, Healthcare and Pensions for EU Citizens under the UK’s European Union (Withdrawal Agreement) Bill.
In the result, when they come into force after the end of the transition period (31 December 2020) the 2019 Regulations will remove the prohibition on discrimination on grounds of nationality (as between EU Citizens and British Citizens) as regards the co-ordination of social security, pensions, and healthcare as provided for in the Co-ordinating Regulations (as part of retained EU law) from people outside the scope of the EU-UK Withdrawal Agreement. Such people will either be from a small class of EU Citizens present before the end of the transition period but who do not fall within the personal scope of the Agreement (e.g. never having been publicly insured in an EU State for social security and never having exercised an EU right of residence in the UK) or, more likely, they will be people who move from the EU to the UK for the first time from 2021 onwards. But what happens if there is a deal between the EU and UK?
A New Free Trade Agreement between the EU and the UK
The European Union has published its draft Partnership Agreement for future relations with the UK. It contains a Protocol on Social Security Co-ordination that contains an equal treatment provision:
Equality of treatment
Unless otherwise provided for by this Agreement, the Parties shall ensure that persons covered by this Protocol enjoy the same benefits and are subject to the same obligations under the legislation of any of the Parties as the nationals thereof.
However, the classes and number of persons protected, that is those falling within the personal scope of the Protocol, are smaller in number than those protected by the EU’s Co-ordination Regulations. Only three small classes would be protected: People (their family members and survivors:
- Whose mobility is provided for under the new draft treaty (students, researchers, trainees, or people in youth exchange programmes)
- Certain pensioners
- People staying temporarily (e.g. as visitors or as service providers)
That is very small beer as compared to those who benefit from the current EU Co-ordination Regulations. Further, even such limited provision depends on a deal being struck.
What is striking, as regards those moving from 2021 onwards is the absence of any provision to coordinate social security, pensions, and healthcare for any EU Citizens working in the UK, and vice versa for any British citizens working in an EU State, even where such persons receive their permission to work and reside under the law of the host State in question (i.e. under local immigration rules). Given that absence, such EU Citizens working in the UK for the first time will be subject to the vagaries of UK law as it applies, including any provision then applicable in UK law (including retained EU law) for co-ordination of social security, pensions, and healthcare, and including by operation of the 2019 Regulations, the absence of any protection against non-discrimination on grounds of nationality.
To complicate matters further, there is potentially a third piece of legislation that may allow for power to be exercised in respect of the co-ordination of social security law by making regulations. In addition to the powers found in section of the 2018 Act and section 13 of the 2020 Act, clause 5 of the Immigration and Social Security Co-ordination (EU Withdrawal) Bill contains a further power to amend retained EU law by making regulations, see my blog post Social Security and Pension aspects of the Immigration and Social Security Co-ordination (EU Withdrawal) Bill
No Deal at the End of the Transition Period
If there is no deal on a future partnership arrangement between the EU and the UK, including on social security, pensions, and healthcare by the end of the transition period (31 December 2020), then all EU Citizens who move to the UK for the first time from 2021 onwards will be subject to UK law any provision then applicable in UK law (including retained EU law) for co-ordination of social security, pensions, and healthcare, and including by operation of the 2019 Regulations, the absence of any protection against non-discrimination on grounds of nationality.