The European Commission recently provided practical guidelines for determining a person’s residence country in the EU, within the framework of Regulation 883/2004 on the coordination of social security systems. In some situations, establishing the “habitual residence” of a person is not straightforward. With the new instructions, the Commission aims to provide some clarifications.
What is the importance of “social security residence”?
The conflict rules on applicable legislation contained in Regulation 883/2004 are mainly based on the work state principle, implying that a person will be subject to the social security legislation of the country in which he/she works. However, a person’s residence country also plays a major role in EU social security coordination.
Residence is defined for social security purposes as “the place where a person habitually resides” and has been further explained in EU case law as the place where the person’s habitual centre of interest is found.
The concept of “residence” is very important for persons in a cross-border situation, as it can be vital for determining the applicable social security legislation (e.g. for multi-state workers performing substantial activities in their country of residence, pensioners, students, etc.), but also for the coordination of various social security benefits (e.g. medical care, unemployment benefits, family benefits). A concrete example of a frontier worker can illustrate this:
Assessment criteria for a person’s residence
To determine a person’s “habitual residence”, the new guidelines mainly recall the different criteria to be taken into account, provided by Article 11 of Regulation 987/2009 (1) (non-exhaustive list):
- Family situation (family status and family ties);
- Duration and continuity of presence in the country concerned;
- Employment situation (nature and specific characteristics of any activity pursued, particularly the place where such activity is habitually pursued, the stability of the activity and the duration of the work contract);
- Exercise of a non-remunerated activity;
- In case of students, the source of their income;
- Housing situation, particularly how permanent it is;
- Country in which the person is deemed to reside for taxation purposes;
- Reasons for the move;
- The intention as it appears from all circumstances.
Value of the criteria
In applying the above criteria, one should keep in mind that:
- This interpretation of the term “residence” has an EU-wide meaning;
- Based on these criteria, a person can only have one residence country and must have one residence country (in or outside the EU);
- The criteria are not exhaustive: other criteria may also play a role;
- None of the criteria is more decisive than another: there is no “quick-and-dirty” criterion;
- Each individual situation has to be analysed according to an overall assessment of all available information relating to the concrete facts and circumstances.
Our recommendation
The person’s residence should, for social security purposes, be thoroughly assessed in each individual case, based on all available factual information of the individual’s personal and employment situation. Although, in many cases, a person’s tax and social security residences will be the same, this will not always be the case. The Commission provided extra tools to make the assessment.
As it is crucial for determining the applicable legislation and receiving social security benefits, this residence assessment should be done thoroughly before an A1 is requested with the social security authorities.
