CONVINUS Global Mobility Alert - Week 24.2024

BEST PRACTICE MIND THE

BEST PRACTICE MIND THE GAP - CHALLENGES OF BREXIT IN SWITZERLAND PART 2 - SOCIAL SECURITY - THE NEW AGREEMENT WITH THE UK NORMA REYNOV, CONVINUS Part 2: Social security - The new agreement with the UK Since the United Kingdom (UK) left the EU on 01.01.2021, social security relations between Switzerland and the UK are no longer governed by the Agreement on the Free Movement of Persons (AFMP) between Switzerland and the EU. A new bilateral agreement has been concluded to ensure that the coordination of social security systems between the two countries is as similar as possible to the situation before Brexit. This was already provisionally applied from 01.11.2021 and came into force on 01.10.2023. Content of the Social Security Agreement The new social security agreement between Switzerland and the United Kingdom goes beyond the usual bilateral agreements by incorporating many provisions from the existing EU regulations. The agreement basically contains the same coordination principles as the Agreement on the Free Movement of Persons: equal treatment, determination of the applicable legislation, aggregation of insurance periods, export of benefits as well as administrative assistance and cooperation between authorities and institutions. However, the EU coordination regulations (Regulations No. 883/2004 and No. 987/2009) have been simplified and adapted to the needs of both countries. Scope of the agreement In contrast to the AFMP, the new social security agreement only contains bilateral provisions that exclusively coordinate the Swiss and British social security systems. In territorial terms, the agreement applies to Switzerland, the United Kingdom and Gibraltar. However, it does not apply to the other Overseas Territories and Crown Dependencies of the United Kingdom. The 1968 Social Security Agreement remains valid for the Isles of Man, Jersey, Guernsey, Alderney, Herm and Jethou. 6 convinus.com

BEST PRACTICE General social security coverage & exceptions for international assignments The persons covered by the agreement are subject to the legislation of a single country (i.e. Switzerland or the UK). As a rule, this is the country in which the persons work. However, there are special regulations for certain groups of people, such as civil servants, seafarers and aircrew. Self-employed persons and employees can be posted to the other contracting state for up to 24 months. The same conditions apply as under Regulation (EC) No. 883/2004: employees must have been insured in their country of origin for at least one month and self-employed persons for at least two months. The competent authorities of both countries may decide to extend the posting for up to a maximum of six years. Non-employed family members (spouses, registered partners and children) who accompany the posted persons or diplomats remain insured in the country of origin together with the employed person. Subordination in the case of employment in Switzerland and the UK The new social security agreement between Switzerland and the UK essentially adopts the familiar 25% rule that has been applied for years in relations with the EU. In simplified terms, this means that social security contributions are paid in the country of residence if a substantial part of the gainful employment is carried out there (i.e. at least 25%). CONCLUSION The new social security agreement between Switzerland and the UK creates the long-awaited legal certainty and clarity following Brexit. It also simplifies social security subordination when working in both countries by closely following the regulations already in force with the EU and not reinventing the wheel. However, existing cases and more complex social security subordination involving countries other than Switzerland, or the UK must be examined separately and cannot simply be dealt with under the new social security agreement. This is because it has become simpler, but by no means easy, to understand and correctly apply social security issues in an international context. 7 convinus.com