Policy paper

Factsheet 4: social security co-ordination

Updated 15 July 2020

This was published under the 2019 to 2022 Johnson Conservative government

What does the Bill do?

The government introduced the Immigration and Social Security Co-ordination (EU Withdrawal) Bill in the House of Commons on 5 March 2020.

The Bill contains a power which enables the government (and/or, where appropriate, a Northern Ireland Department) to amend the retained EU social security co-ordination rules and deliver policy changes at the end of the transition period.

Background

The EU Social Security Co-ordination Regulations (“SSC Regulations”) co-ordinate access to social security for individuals moving between EEA states (and Switzerland).

The SSC Regulations apply to EEA citizens and UK nationals in the UK and in the EEA, and to some non-EEA citizens. The SSC Regulations determine which EEA state’s social security legislation applies: the rules ensure an individual is only subject to one EEA state’s legislation at any one time, determine where contributions are due and which state is responsible for payment of certain types of benefit including the State Pension, UK contributory benefits as well as some non-contributory benefits. The SSC Regulations provide for equal treatment of those in scope and for EEA states to take into account periods of work, insurance or residence in another EEA state when determining entitlement to benefit, which is known as “aggregation”. The SSC Regulations also enable individuals, in certain circumstances, to receive certain benefits from the UK irrespective of where they reside in the EEA (i.e. UK nationals and EEA citizens can “export” benefits from the UK).

The SSC Regulations are retained in UK law at the end of the transition period by the EU (Withdrawal) Act 2018, and this Bill takes a power which allows an appropriate authority to modify these retained SSC Regulations (and to make necessary consequential modifications to primary legislation and other retained EU law). An “appropriate authority” is defined as the Secretary of State or the Treasury, a Northern Ireland department, or a Minister of the Crown acting jointly with a Northern Ireland department.

The EU (Withdrawal Agreement) Act 2020 establishes a cohort of citizens to whom the EU’s current social security co-ordination rules will continue to apply after the end of the transition period, whether or not a future relationship on social security co-ordination is agreed and no matter what the future relationship on social security co-ordination covers. This cohort primarily consists of EU citizens living or working in the UK and UK nationals living or working in the EU at the end of the transition period as well as certain other groups. Changes to the rules on social security co-ordination made under this Bill will not be applied to this group for as long as they remain in scope of the Withdrawal Agreement. The EU (Withdrawal Agreement) Act 2020 also protects the social security position of individuals who have lived and worked between the UK and the EU by the end of the transition period.

The UK signed an agreement with Ireland in February 2019 which protects the social security rights of all UK and Irish citizens travelling between the UK and Ireland.

What will the government use these powers to do?

As set out in the UK’s approach to negotiations with the EU, social security coordination can remove barriers and support mobility of labour between countries. The UK government has set out that it is ready to work to establish practical, reciprocal provisions on social security coordination under the future relationship and that any agreement should be similar in kind to agreements the UK already has with countries outside the EU and respect the UK’s autonomy to set its own social security rules. On 19 May 2020 the government published its draft Social Security Co-ordination Agreement.

This includes provisions to support business and trade through ensuring workers and their employers only pay contributions in one country at a time, and so workers, including the self-employed, can aggregate contributions made in more than one country towards their state pension. The government would require clause 5 to repeal those areas of the retained regulations not covered in a reciprocal agreement with the EU.

The government has been clear there will be changes to future social security co-ordination arrangements including, as announced at Budget 2020, stopping the export of child benefit. Our future Social Security Coordination arrangements are subject to negotiations with the EU. The UK expects arrangements in relation to, but not limited to, disability and unemployment benefits will also change and are likely to be less comprehensive in future. Some benefits will in future be available for a time-limited period, in line with the rules for non-EEA countries, for those who move to the EU from the end of the transition period and are not covered by the Withdrawal Agreement. This is governed by current UK law.

The social security coordination powers within the Immigration and Social Security Coordination (EU Withdrawal) Bill will enable the government to deliver on this commitment and respond at pace to the outcome of negotiations with the EU to deliver changes from the end of the transition period, ensuring businesses and citizens have certainty on the rules which will apply.

Regulations issued pursuant to this power will be subject to the draft affirmative procedure, meaning they will only be made with the approval of both Houses of Parliament.