Brexit: what you need to know about social insurance

Melanie Imper Senior Associate Treuhand/Corporate Support Services Switzerland, PwC Switzerland 16 Feb 2021

The United Kingdom (UK) left the EU on 31 January 2020 (Brexit). The transition period, during which EU law applied to the coordination of the social insurance systems, expired at the end of 2020. What happens now?

The new coordination requirements between Switzerland and the UK are still being negotiated. Up until the end of 2020, regulations (EC) No. 883/2004 and (EC) No. 987/2009 applied. As of 1 January 2021, the bilateral social security agreement, which came into force in 1969, applies on a temporary basis.

Social security agreement between the EU and UK

The UK government and the European Commission agreed upon their future partnership on 24 December 2020 through a Trade and Cooperation Agreement. A sub-area concerns the coordination of the social security systems and the visa for short visits. This means that certain rights of EU citizens and British nationals have been secured since 1 January 2021. More specifically: access to mutual health insurance is ensured and cross-border commuters only need to pay social insurance contributions in one country – usually the one where they work.

Employees who are seconded between the UK and EU member states can remain subject to social insurance for up to 24 months in their home country, provided that the EU member state applies the rules of the social security agreement for secondments (detached workers). EU member states must confirm or decline this by 1 February 2021. A certificate regarding social security subordination must be requested for secondments that began before 1 February 2021.

In the case of employees from the UK and EU who work in different countries (multi-state workers), the protocol is aimed at coordinating social security in line with the existing rules. There is no option for individual states to not apply this.

UK and Switzerland

In addition to the bilateral social insurance agreement, the Citizensʼ Rights Agreement and the Services Mobility Agreement also came into force on 1 January 2021 in Switzerland. The Citizensʼ Rights Agreement protects the rights acquired by 31 December 2020 under the Agreement on the Free Movement of Persons (AFMP) and is only applied on a provisional basis. The Services Mobility Agreement covers the temporary delivery of cross-border services and is limited to two years. For more information on this topic, visit the official website of the Federal Social Insurance Office (FSIO).

If you employ staff who are affected by this, you should monitor the developments relating to Brexit and keep up to date on the negotiations between the UK and Switzerland.

Contact us

Melanie Imper

Melanie Imper

Senior Associate Treuhand/Corporate Support Services Switzerland, PwC Switzerland

Tel: +41 58 792 28 32