Social Security Obligations When Working Abroad in the EU

When taking up employed or self-employed activity abroad within Europe, the question arises – particularly with regard to a possible obligation to be insured in the other EU member state – as to which social security system applies to the person concerned. The legal basis is EU Regulation 883/2004 of 29 April 2004 on the coordination of social security systems, which has applied since 1 May 2010 and has fully replaced the earlier Regulation (EEC) 1408/71. It is supplemented by the Implementing Regulation (EC) 987/2009 and by later amending regulations. Under Art. 11(1) of Regulation 883/2004, the basic principle applies that only the legislation of a single member state applies to employment or activity carried out within the EU. Which member state’s insurance obligation applies is determined by Articles 11 et seq. of Regulation 883/2004. The Regulation also applies in relation to Iceland, Liechtenstein, Norway, and Switzerland.

1. Activity or Employment in Only One Member State

Where an employed or self-employed activity is carried out in only one member state, the person concerned is, under Art. 11(3)(a) of Regulation 883/2004, in principle subject exclusively to the social security law of that state. However, the person remains insured under their original system if one of the exceptions provided for in Articles 12 et seq. of Regulation 883/2004 applies – in particular in the case of a posting of workers or a temporary “self-posting,” each of no more than 24 months.

a) Posting of Employed Persons

A posting within the meaning of Art. 12(1) of Regulation 883/2004 requires a continuing employment relationship with an employer in the posting state, an actual posting situation, and a time limit on the posting. To prove that the legislation of the posting state applies, the posted employee presents the competent foreign institution with the A1 certificate. For persons with statutory insurance in Germany, this must be applied for from the relevant health insurance fund; for voluntarily insured persons, from the German Statutory Pension Insurance (Deutsche Rentenversicherung Bund)

b) Temporary Activity of a Self-Employed Person in Another Member State

A corresponding rule applies to self-employed persons under Art. 12(2) of Regulation 883/2004: the legislation of the home state continues to apply provided the anticipated duration of the activity in the other member state does not exceed 24 months. A longer period of applicability requires authorization from the competent foreign authority.

c) Exception Agreement

If it is established from the outset that the activity in the other member state will last longer than 24 months, an exception agreement under Art. 16 of Regulation 883/2004 may be considered, provided the person concerned has a sufficient interest in the continued application of the previous legislation – for example, because their retirement provision is already structured around the existing system. The application must be submitted to the competent authority of the state whose legislation is to continue to apply; for Germany, this is the German Liaison Office for Health Insurance Abroad (DVKA) in Bonn. In practice, the member states involved frequently agree to such an exception agreement for a period of up to five years.

2. Activity or Employment in More Than One Member State

A person who works in several member states remains subject to compulsory insurance in the state in which they reside, provided they also carry out a substantial part of their activity there. If the activity is not also carried out in the state of residence, employed persons are subject to compulsory insurance in the member state in which the employer is based, and self-employed persons in the member state in which they carry out the main part of their activity.

3. Employment and Self-Employed Activity in Different Member States at the Same Time

If a person simultaneously carries out employed work and self-employed activity in different member states, under Art. 13(3) of Regulation 883/2004 the entire economic activity is in principle attributed to the law of the state in which the employed work is carried out. If the self-employed activity is carried out in certain member states listed in Annex VII of the Regulation – including Greece – employment and self-employed activity are, by way of exception, attributed to the law of different member states.