The main purpose of the regulations on the coordination of social security systems within the framework of the European Union is to harmonize the different national social security systems in such a way that not only is the mobility of workers encouraged, but also that it is guaranteed that there is the minimal impact on future social benefits. This Regulation has proven so effective that even the Brexit Agreement has replicated most of its structure. What does this Regulation tell us?
Principle of Single Legislation
The basic principle established by this Regulation is that European workers are covered by the legislation of a single country and therefore can only contribute in a single country; as a general rule, contributions are made in the country where the labor is carried out. However, we find that there are two exceptions to this general rule: posted workers and so-called Multi-State Workers. In order not to deviate from the topic at hand, here is the article in which we explain these two exceptions in a more comprehensive way: Differences between posted workers and expatriate workers.
Principle of Aggregation
The principle of aggregation implies that, in order to meet the minimum exclusion period required to access a contributory benefit, all periods of contributions in the different countries of the European Union will be taken into account. That is to say, this principle allows us to add together the periods of contribution in other member states to reach the minimum exclusion period in order to obtain benefits.
This principle only operates for the purpose of proving that the minimum time period required to generate the right to a contributory benefit has been attained. On the other hand, it does not mean, in any case, that the contributions actually made in each of the countries are taken into account. That is, the contribution bases of a worker who has spent 5 years in Sweden are not taken into account, for example, simply that during those 5 years they were contributing.
However, in parallel to this Regulation, Spanish jurisprudence has specified that, when determining the regulatory basis of a contributory benefit, a Spanish worker cannot be “penalized” for the fact of having been posted to work or for the fact of having worked in another country of the European Union. Thus, jurisprudence establishes that a pensioner cannot see their pension reduced due to the fact of having contributed in another member country of the European Union because this would imply going against the principle of the freedom of movement of people, goods, and services within the European Union.
Posting to countries with a bilateral agreement outside the EU
There are differences in the case of sending a worker to a country with a bilateral agreement outside the European Union. In this situation, these first two principles also operate in a similar way, but instead of calculating the regulatory base of a benefit, the criterion of a contribution gap is applied for the entire period in which the worker has contributed in another country so that, in this case, there may be situations in which certain social benefits could be reduced by the fact of having worked in another country. Therefore, GD Global Mobility studies and plans the impact that a posting of workers may have on International Social Security and we determine the legal options that our social security legislation offers to mitigate these possible losses.
Principle of exportability of benefits
This principle determines that, when a benefit is generated in one country, it must be possible to receive that benefit, even if you live in another country. In other words: Contributory benefits recognized by a Member State cannot suffer any reduction, modification, or suspension, due to the fact of residing in another State.
Principle of equal treatment
The fourth principle indicates that, in the event of an international posting of workers, they must have the same rights and obligations as nationals in the country in which they are residing, regardless of their nationality.
As we mentioned at the beginning, these are the only four principles on which the European Regulation on the Coordination of Social Security Systems is based. However, when we are faced with international mobility, each case must be analyzed in an individual way, studying the main aspects that must be taken into account when moving a worker to another country: social security, labor and migration aspects, international taxation, and shadow payroll. Contact us if you need advice and management of the international mobility of workers.