Arrangements within the EU
Principle of operation
Within the EU and in the context of social security systems, the legislation of only one EU Member State is applicable at any one time. The organisation of the social security systems, that is, their financing, access requirements, and the extent of social benefits, is managed differently in the various Member States.
The legislation of which Member State is to apply is mainly laid down in the coordination rules contained in Regulation (EC) No 883/2004. Further procedures on implementing these rules can be found in Regulation (EC) No 987/2009.
The regulations apply in the EU Member States of Belgium, Bulgaria, Croatia, Denmark, Germany, Estonia, Finland, France, Greece, Great Britain, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Sweden, Slovakia, Slovenia, Spain, the Czech Republic, Hungary, Cyprus.
The regulations apply to Union citizens (nationals of EU Member States) and to refugees and stateless persons who are resident in an EU Member State. Under Regulation (EU) No 1231/2010 they also apply to nationals of third countries who are legally resident in an EU Member State. There are, though, exceptions relating to Denmark and Great Britain.
The principle is that the legal provisions of the EU Member State in which the employment takes place apply. There are, though, a number of exceptions to encourage the free movement of services and the free movement of workers.
Exceptions to applicability
Posting within the EU
An employee’s place of employment normally changes if the employee is temporarily posted to work in another EU Member State. By way of exception, the applicable social insurance legislation does not change if the following criteria are met:
- the expected duration of the posting abroad is not more than 24 months,
- the direct relationship between the employer and the employee is maintained,
- substantial activities of the employer in the state in which he is established,
- the employee is not replaced by another person.
If the employee has been employed in order to be posted, the relevant criterion is which legislation applied to him immediately before being posted (Article 14 (1) of Regulation (EC) 987/2009).
The employer informs the competent social insurance institution - where possible, in advance - of the posting of his employee. The social insurance institution then issues an A 1 certificate. In Germany this is done by the employee’s statutory health insurance scheme. If he is not affiliated to a statutory health insurance, the certificate is issued by his pension insurance scheme or the Arbeitsgemeinschaft Berufsständischer Versorgungseinrichtungen e.V. (Consortium of Professional Association Pension Schemes).
The certificate shows which social insurance legislation is applicable.
Dutch construction company N receives an order to cover the facade of a house in Germany with clinker bricks. To do this, N posts its workers, four Dutch nationals and one Moroccan national, to Germany for four weeks, and informs the social insurance scheme which confirms in certificate A 1 that Dutch social security legislation continues to apply. The N company need not pay any social insurance contributions in Germany, as the Dutch rules apply.
Working in several EU Member States
There are some employees who regularly work in more than one country, for two different employees, for example, or for one employer who is active both domestically and abroad. For such employees, too, the rules of only one EU Member State’s social security legislation apply.
The social insurance of employees who usually work in two or more EU Member States is either in the state in which they reside or in the state in which their employer is established.
| Applicable social insurance legislation | Requirements | Provision |
|---|
| State of residence | A substantial part of the activity in the Member State of residence (which would not be the case if the working time and/or pay is less than 25 percent) | Art. 13(1) a)
Reg. (EC) 883/2004;
Art. 14(8)
Reg. (EC) 987/2009 |
| No substantial part of the activity in the Member State of residence; employed by several employers in different Member States outside the Member State of residence | Art. 13(1) b) (iv) Reg. (EC) 883/2004 |
| State where employer is established | No substantial part of the activity in Member State of residence (rule of thumb: working time and/or pay is less than 25 percent) | Art. 13(1) b) (i), (ii), and (iii)
Reg. (EC) 883/2004;
Art. 14(8)
Reg. (EC) 987/2009 |
| Home base | For flight crews | Art. 11(5)
Reg. (EC) 883/2004;
Art. 14(5a)
Reg. (EC) 987/2009 |
No specific rules apply to other personnel working in international transport services (professional drivers).
If, in addition to employment, an individual is self-employed, he also falls within the scope of the legislation of the Member State of employment (Article 13(3) of Regulation (EC) 883/2004).
The competent social insurance institution issues an A 1 certificate. This is usually the German Health Insurance Liaison Office - International Division (Deutsche Verbindungsstelle Krankenversicherung - Ausland (DVKA)) in Bonn. The certificate shows which social insurance legislation (of which Member State) is applicable.
P, a Polish national, lives and works in Danzig. She also works in Germany every year during her holidays to help with the harvest there.
She presents an A 1 certificate from the Polish social insurance institution ZUS to the German farmer. During her employment in Germany the Polish social legislation continues to apply to her, and so the German farmer transfers her social insurance contributions to Poland.
Special agreements
In individual cases the EU Member States concerned can agree which legislation should apply, by the competent authorities making a special agreement. The relevant application must be lodged in the EU Member State whose legislation is to be applied.
In Germany, the German Health Insurance Liaison Office - International Division (Deutsche Verbindungsstelle Krankenversicherung - Ausland (DVKA)) is the competent body for such special agreements.
Any special agreement is written down in an A 1 certificate.
Additional summary information is available on the European Commission website under the heading "Employment, social affairs and equal opportunities".
