Brexit and Social Security Rules : the draft withdrawal agreement has just been released.

On November 13, 2018, the United Kingdom and the European Union (EU) announced that they reached an agreement on the British withdrawal from the European Union (Brexit).

This agreement comes as the Brexit date set for March 29, 2019, is now very close.

This draft withdrawal agreement has just been made public and provides for a transitional period that ends on 31 December 2020, designed to avoid any regulatory vacuum situation.

Thus, during the period between the entry into force of the withdrawal agreement and 31 December 2020, European Union law will continue to apply in the United Kingdom and to the United Kingdom, even though the British will cease to sit in European agencies and bodies. Similarly, the Court of Justice of the European Union will retain its powers and responsibilities during this period.

This transitional period will allow the United Kingdom and the European Union to negotiate the necessary agreements for the continuation of their relations within the framework of bilateral or international agreements. These new agreements will take over from the regulations of the European Union when these will cease to apply in the United Kingdom.

The draft agreement devotes articles 30 to 39 to Social Security Coordination Rules. In particular, it provides that the European Social Security Regulations Nos 883/2004 and 987/2009 will continue to apply to the following persons, as long as their situation continues without interruption:

  • Employed or self-employed workers in the United Kingdom who are covered by the legislation of a Member State of the EU (Article 30).
  • Salaried or self-employed workers settled in a Member State of the EU but falling under the UK social security legislation.

More generally, the same will apply for:

  • British nationals or residents who, at the end of the transitional period, are subject to the social security legislation of another EU Member State (as long as their situation continues without interruption).
  • Nationals or residents of a EU Member State who, at the end of the transitional period, are covered by United Kingdom social security legislation (as long as their situation continues without interruption).
  • Third-country nationals, who fulfill the conditions for the application of Regulation 849/2003, are also eligible for the continuation of the coordination rules between the United Kingdom and the other Member States, when they  benefited from it at the end of the transitional period.

Regarding health expenses, the draft agreement gives competence to the legislation which was applicable to the insured person according to the European Social Security Regulations before the end of the transitional period, provided the illness or the accident occurred before that date.  Costs incurred after that date will also be covered by said legislation, if they relate to an illness or an accident which occurred before that date (Article 35).

Finally, persons who have ceased to be subject to the legislation of a EU Member State before the end of the transitional period, retain the right to obtain the aggregation of their periods of insurance in the United Kingdom and in the other Member State for the calculation of their benefit entitlements, in particular as regards retirement pensions (Article 32). As early as the preamble, the draft agreement recognizes the need to preserve and protect the rights derived from periods of insurance completed in the United Kingdom and in each of the Member States of the Union (§ 6 of the preamble).

This draft agreement was adopted by the British government last week, despite the significant political difficulties faced by Theresa May.

It must now be signed by the European Council on November 25 and will have to be ratified by the European Parliament and the British Parliament so that it can enter into force.

The road ahead is still quite long !!!