Social Security and the EU Settlement Scheme: why we need written documents confirming EU citizens are protected by the Withdrawal Agreement by Christopher Desira & Charlotte Rubin

The EU Settlement Scheme (EUSS), to which all EU/EEA/Swiss citizens living in the UK should apply should they wish to remain in the UK after the end of the transition period on 31 December 2021, confirms the applicant’s right of residence in the UK after Brexit. This aim – to provide EU citizens who live in the UK with status to remain after free movement ceases to apply in the UK – seems simple enough. However, as we have written many times before, the Scheme is not perfect, and has many gaps. Here, we focus on one of those gaps: social security for EEA citizens, an issue which the EUSS does not address, as it fails to confirm explicitly that people who obtain status under the Scheme are protected by the Withdrawal Agreement. Whether someone is protected under the EU Withdrawal Agreement is important, as it determines whether the applicant in question is entitled to social security benefits in the UK.

The relevant framework to understand whether a person is entitled to social security in the UK after Brexit is quite complicated. It requires an understanding not only of UK and the member state’s immigration rules, but also its social security rules, the EU-UK Withdrawal Agreement, the Free Movement Directive and the European Union Social Security Co-ordination Regulations (883/2004).

The 883/2004 coordination Regulations do not establish a single, unified social security system across the EU, but instead provide a reciprocal framework to protect the social security rights of people moving within the European Economic Area (EEA) states (and Switzerland). As such, each member state can choose what sort of benefits-in-kind and cash benefits it funds for nationals from another member state.

The coordination Regulation tells us which country is responsible for paying a person’s benefits, where those benefits can be received and what benefits may be redirected. In short, it simplifies the process of claiming and making benefits, allowing all benefits to be made in one single payment across borders. It provides a mechanism for countries to speak to each other, to resolve who meets the costs and where they will be paid, with an ability to challenge those decisions.

Member States however remain responsible for their own social security systems: it is up to them to decide which benefits are granted, at what rate, as well as define conditions for entitlement. So, a person’s entitlements is dependent on the domestic rules that are in place during their periods of residence in the respective EEA country and the UK.

All benefits referred to in the coordination Regulations are included in the Withdrawal Agreement at Part Two, Title III. This section ensures that if a person is entitled to benefits now, before the end of the transition period, they will maintain the right to those benefits and, if they are entitled to a cash benefit from one country, they will in principle be entitled to receive it even if they decide to live in another country. Title III also covers groups of people, other than those persons meeting the Free Movement Directive, who might also benefit from coordination.

There are four main principles for coordination. The first is the ‘single state principle,’ which sets out that at any one time, a person is covered by the social security system of one single country and is only liable to make contributions in one country – this is what we call the ‘competent state.’ The second is the prohibition of discrimination and guarantee of equal treatment, which sets out that a person has the same rights and obligations as a national of the Member State where they are covered. The third is the idea of ‘aggregation’ which establishes that periods of insurance, employment or residence in other Member States can be taken into account when determining a person’s eligibility for benefits. Finally, the last principle concerns exportability, and explains that a person can receive benefits from one Member State even if they are resident in another Member State.

All the persons who fall within the scope of the provisions set out above get the benefit of the rules and objectives set out in the coordination Regulations, its implementing Regulations and its governing EU treaty provision (Article 48 of the Treaty on the Functioning of the European Union). In other words, the full coordination rules apply and so there is protection for social security, healthcare, and pensions.

There is a saving provision: anyone who does fall within the four categories set out above, but who falls within Article 10 of the Withdrawal Agreement is also covered (as are their family members and survivors) and will remain entitled to social security benefits. Article 10 refers to the categories of persons who continue to have rights of residence under the Withdrawal Agreement. So, if it’s too complex to determine eligibility in one of the categories above, then a person can still remain protected by the coordination rules in the future if they have attained the right of permanent residence in the UK, as long as they retain that right of residence.

Now we come to the EU Settlement Scheme. As we have explained before (for example when assessing EEA applications for naturalisation), settled status does not confirm whether a person falls under these provisions. This can lead to complex coordination in the future. The UK may not be able to determine that a person falls within one of the four categories, and this may lead to disputes with other states also involved in the coordination of rights. So, without a document confirming that they fall within the Withdrawal Agreement, a person with settled status may be excluded from social security coordination provisions under the Withdrawal Agreement, unless they have enough evidence to show prior exercise of EU rights. This is obviously problematic.

Another point to note is that the persons who fall within Article 10 of the Withdrawal Agreement are only covered for so long as they have a right to reside under Article 13 (residence rights) of the Withdrawal Agreement or a right to work in their state of work under Article 24 (rights of workers) or Article 25 (right of self-employed persons) of the Withdrawal Agreement. Again, this risks excluding settled status holders based merely on five years’ presence from social security co-ordination provisions under the Withdrawal Agreement unless they can show the prior exercise of EU rights.

This issue is easy to resolve: applicants who receive settled status and have been beneficiaries of the Withdrawal agreement should simply receive a document to confirm that, which would enable them to claim the benefits they are entitled to without any complications. Unfortunately, the government has previously shown that it is not keen on providing physical status at all – let alone physical proof of entitlement to benefits.

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