Partner Article

Benefit curbs on EU migrants?

So foreigners are coming to the UK in droves to take advantage of the social security benefits and we need to change the EU rules to stop it. Really? What exactly are the rules?

There are guarantees for some fundamental freedoms to all European citizens, one being the right to move anywhere in the EU to seek work. This applies to Brits going to Spain or Sweden as much as to Latvians and Lithuanians coming the other way.

There’s an obvious problem, though - you might lose out on state benefit entitlements (principally your state pension) if you move to a new country and don’t pay at least the minimum social security contributions to qualify. So the rule is that you normally pay social contributions wherever you work, unless you’re on a short-term assignment abroad for an employer based in your home state.

You also claim your benefits from that state as it collects NI, and if you haven’t enough contributions paid in that country, they take your previous contributions elsewhere into account.

If you pay NI while working in the UK, the UK pays your Child Benefit bill, wherever your wife and children live in the EU. So it’s no surprise when the Polish Foreign Minister says that the UK should pay Child Benefit for children in Poland when the parents pay tax and NI in the UK - that’s how it’s worked since 1973.

As for pensions, each country to which you contribute pays part of your pension.

But there are limits. The EU rules deal only with contributions and contributory benefits - state pension, sickness benefits, unemployment and family benefits. They don’t extend beyond that to means-tested social safety net benefits such as pension credit, housing benefit and income support. It’s not a free-for-all, and member states set their own rules in this area.

The world has changed, so there’s an argument that the EU ought to change with it. But in what way? There’s a strong argument that we need a single market for labour, and you can’t have that if the social security systems of member states put up artificial barriers to free movement.

And social security is one of the few areas in EU law where any changes need unanimity among the 28 member states. Every state, the UK included, has a veto – so nothing ever changes quickly.

This was posted in Bdaily's Members' News section by Baker Tilly .