September 2016 Impact of Brexit

04/09/2016

Brexit could have significant implications for the social security rights of European Union (EU) nationals living in or wishing to move to the UK, and for UK expatriates elsewhere in the EEA and those considering moving abroad, according to a recent Parliamentary report.

The briefing highlights that entitlement to welfare benefits for people moving between EU Member States is closely linked to free movement rights for EEA nationals. While existing social security rules continue to apply until Britain leaves the EU, in the longer term, the situation depends crucially on the outcome of negotiations between the UK and the EU on free movement of people.

 

The briefing goes on to explore the implications of a range of post-Brexit scenarios, and says that:

If Brexit means an end to free movement rights, the UK would be able to impose restrictions on access to many social security benefits via immigration law, for example by making EU nationals leave to remain in the UK subject to a condition that they have no recourse to public funds. Entitlement to contributory social security benefits could also be limited by limiting access to employment.

 

Brexit also has implications for UK nationals living in other EU countries, since Member States would be free to impose corresponding restrictions on entitlement to their benefits. While the implications for UK nationals resident overseas would depend on the attitude of their Member State of residence, it is possible that restrictions on entitlement to benefits, along with other restrictions on rights of residence and changes to immigration status, could result in significant numbers seeking repatriation.

 

UK withdrawal from the EU would also mean withdrawal from the long-standing provisions in EU law to co-ordinate social security schemes for people moving within the EU, which also apply to non-EU countries and Switzerland. Withdrawal from the system of co-ordination would pose questions, such as how to deal with people who have lived and worked in more than one Member State and accrued rights to contributory benefits on the basis of social insurance paid in different countries. Unless alternative arrangements were put in place, UK nationals who had spent periods living and working abroad could have their pension rights significantly reduced.

 

In place of the co-ordination rules, the UK could seek to negotiate bilateral reciprocal social security agreements with individual Member States. These might cover matters such as reciprocal recognition of periods of insurance or residence for benefits purposes, exportability of benefits (and continued annual uprating of benefits for people living abroad)

 

As an alternative to seeking individual bilateral social security agreements, the UK could seek to negotiate a single agreement with the EU as a whole, which would simplify matters for people who had worked and been insured in more than two Member States. However, such an agreement might end up closely resembling the existing EU social security co-ordination rules. It seems highly unlikely that the EU would accept any arrangement that discriminated between different Member States, so the UK may have to grant the same rights to all EU nationals, including those from less prosperous Eastern European accession states.

 

 

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