What do you think of the LITRG website?
What if I am a posted worker from the EU, Norway, Iceland, Liechtenstein or Switzerland?
Prior to the UK’s departure from the European Union (EU), the social security system of the UK was co-ordinated with that of the rest of the EU, Norway, Iceland, Liechtenstein and Switzerland, such that generally you were only liable to social security in one country at any one time. These rules continue to apply throughout the transition period following the UK’s departure from the EU on 31 January 2020 (at the time of writing this is due to end on 31 December 2020) and for some individuals they will continue beyond the end of the transition period.
Where these rules apply, you may not have to pay National Insurance contributions (NIC) if you were employed in another country but were then sent to the UK to do your present job working for the same employer (as long as you are not replacing another worker). This is to minimise the social security contribution record of internationally mobile workers being fragmented across different member states.
For more information, go to HM Revenue and Customs’ (HMRC) guidance, RDR1, chapter 11. You can find this on GOV.UK.
How do I know if the co-ordinated EEA rules on social security apply to me?
If you are posted to the UK from an EEA country (or Switzerland) prior to the end of the Brexit transition period (at the time of writing, this is scheduled to be 31 December 2020) then the co-ordinated EEA rules on social security will apply until at least the end of the transition period.
A ‘posted’ worker is a worker who is sent to work in the UK by their non-UK employer and they remain employed by that non-UK employer.
If you remain in the UK at the end of the transition period and your circumstances remain unchanged then you should continue to be covered by the co-ordinated EEA rules on social security. These rules can continue to apply if you have a change of circumstances but you nevertheless have an ‘uninterrupted cross-border link’ between the UK and your home country.
For information on what is meant by an ‘uninterrupted cross-border link’, please refer to Section 9 of the guidance published by the EU Commission. Full details can be found in Article 30 of the withdrawal agreement itself.
What if the co-ordinated EEA rules on social security do not apply to me?
If you are posted to the UK from an EEA country (or Switzerland) for the first time after the end of the Brexit transition period, then you would not be covered by the UK’s withdrawal agreement from the EU and hence the full co-ordinated EEA rules on social security will not apply.
This may also be the case where an individual is posted to the UK from an EEA country (or Switzerland) prior to the end of the transition period and they have a ‘cross-border link’ (see above) at the end of the transition period, but owing to a change of circumstances that cross-border link is broken.
In this case, the position will depend on the outcome of negotiations between the UK and the EU on the degree of social security co-ordination that will apply after the end of the transition period. Under the law as it currently stands, the position would be determined under old social security agreements which the UK had negotiated with EEA member states (where these exist) or otherwise under domestic law in the UK.
⚠️ The answers to the following three questions assume that you are posted to the UK from an EEA country or Switzerland and co-ordinated EEA rules on social security apply to you throughout your posting to the UK.
Do I have to pay National Insurance contributions (NIC) in the UK?
Generally, people who are posted to the UK for no more than 24 months must remain in their home country social security scheme. If this applies to you, you do not have to pay NIC in the UK.
For longer assignments, as an exception, an agreement can generally be reached between the home and UK authorities for a posted worker to stay in their home country scheme for a longer period, typically up to five years.
Similar rules apply if you are self-employed and come to work temporarily in the UK.
If you fall under these rules you may not need to get a National Insurance number and will instead be allocated a different type of reference, which looks like this 54 M4 46 90, and will be used by HMRC to identify you.
What do I do if I want to continue to pay social security in my previous country of residence?
If you are posted to the UK from for more than 24 months but less than 5 years, you can request to remain in your home country social security system. If you are posted to the UK for up to 24 months, you must remain in your home country system.
Wherever you are remaining in your home country social security system (that is, you will remain ‘insured’ in your home country), you should ask your employer to obtain a certificate A1 (previously E101) from your home country (the application form will need to be completed by your employer). This form certifies that you remain liable to contribute to the social security scheme only in the country which issued it and for the period of time specified in it (therefore for this period you will be exempt from paying NIC in the UK).
If you are normally self-employed abroad and coming to work temporarily in the UK, you can find out which body can issue the A1/E101 document by contacting your home country liaison office for posted workers. To get the form, you have to prove that the activities you intend to pursue abroad are "similar" to those you pursued in your home country. See the EU guide on posting rules for more information.
Am I eligible for UK social security benefits?
If you do not have to pay NIC because you continue to pay into your home country scheme under the European regulations, you will not necessarily lose entitlement to social security benefits in the UK.
The European agreement contains detailed rules for different types of benefit and you should contact the Department for Work and Pensions in the first instance to determine whether you will receive benefits from the UK or from your home country.
If you are hired in the UK by a UK employer (that is, you work in the UK under a local contract), these European rules will not apply and you will have to pay NIC from the outset, which could count towards benefits payable by the UK. Even if you do not claim any benefits in the UK, or are here for just a short time, this NIC is not typically reclaimable when you leave.
The contributions paid are not transferable to another country's scheme. However, periods of contributions paid in the UK may help to determine whether or not you are entitled to state benefits in your home country. This is called the ‘aggregation principle’ and essentially allows you to aggregate (add together) your periods of overseas contributions with periods of UK social security contributions where necessary, in order to meet the overseas requirements as to whether or not the requirements for the minimum number of years’ contributions are met. The contributions themselves are not transferred from one country to another. You can find out more about social security benefits within the EEA on the EU's website.
⚠️ If you are an EEA citizen and you have paid UK NIC prior to the end of the Brexit transition period then you should be able to benefit from the ‘aggregation principle’ under Article 32 of the UK’s withdrawal agreement with the EU. This is the case even for periods during which you might pay UK NIC after the end of the transition period. We discuss this further at How does the UK state pension work for migrants?.
⚠️ If you are an EEA citizen and you have not paid UK NIC before the end of the transition period (for example, you arrive in the UK for the first time after the end of the transition period), then you will not be covered under the same terms of the withdrawal agreement and your ability to aggregate periods of UK NIC will be determined as a result of negotiations between the UK and the EU.
If a record of UK contributions is needed by the authorities in the other country to decide a claim, they should contact HM Revenue & Customs (HMRC) on your behalf to obtain details of the UK NIC record. However, it is sensible to keep your own records of any UK NIC you have paid so that you can evidence this to the foreign authority if necessary. You can print out a statement of your National Insurance record from your Personal Tax Account.
In some cases, the foreign authority may ask you to obtain:
- a statement to assist sickness benefit claims (formerly known as an E104);
- a Portable document U1 to assist unemployment benefit claims (formerly known as an E301); or
- a full statement of National Insurance (formerly known as an E205).
If so, you should contact HMRC. You may need to complete and return form CA 3916 enclosing copies of your last payslip and any forms P60 from your employer showing your total pay, tax and NIC deductions issued at the end of a tax year. You can find the CA 3916 and guidance on GOV.UK.
The benefit claim in the other country will be decided using that country’s own rules; it will not be decided under UK rules. The fact that the UK issues a statement of contributions paid in the UK does not automatically mean you are entitled to benefits in the other country.