What if I am a posted worker from the EU, Norway, Iceland, Liechtenstein or Switzerland?
The social security systems of EU, Norway, Iceland, Liechtenstein and Switzerland, are co-ordinated such that generally you are only liable to social security in one country at any one time. Furthermore, under these rules, 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.
Following the 2016 European Union (EU) membership referendum in the UK, on 29 March 2017 the UK provided notice to the European Council of its intention to withdraw from the EU under Article 50 of the Treaty on European Union. At the time of writing (in March 2019), the date and terms of the UK’s departure from the EU have not yet been finalised. Therefore, please note that the guidance below reflects the law as it applies before the UK’s departure from the EU.
For more information, go to HM Revenue and Customs’ (HMRC) guidance, RDR1, chapter 11. You can find this on the GOV.UK website.
The answers to the following questions assume that you are posted to the UK from an EEA country or Switzerland.
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 day one, 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 website.
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.
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 form P60s from your employer showing your total pay, tax and NIC deductions issued at the end of a tax year. You can find the form and guidance on the GOV.UK website.
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 entitle you to benefits in the other country.