Basic coordination principles
The basic coordination principles are: equal treatment and non-discrimination, application of legislation/law of only one State at any time, aggregation of insurance periods and export of benefits abroad.
1) Equal treatment and non-discrimination
Unless otherwise provided for by this Regulation, persons to whom this Regulation applies enjoy the same benefits and are subject to the same obligations under the legislation of any Member State as the nationals thereof. Any discrimination based on nationality is prohibited, including in the area of social security. The general principle of equal treatment is of particular importance for workers who do not reside in the Member State where they work, including frontier workers.
Equal treatment regarding benefits, income, facts and events are also part of this principle. Member States are required, when granting and paying social security benefits, to take into account all the circumstances which occurred in another Member State as if they had occurred in the territory of that State, and these are decisive in relation to social security benefits.
2) Determination of applicable legislation – application of the legislation of one country
As a general rule, only one State’s legislation may apply to a person at a particular time, so that social security contributions or insurance are paid/returned by the person in only one country.
The law of the State to which the person is subject applies is decided by the social security institutions and the person cannot choose which legislation will apply to them.
Title II – Articles 11 to 16 of Regulation (EC) No 883/04 contain provisions determining the rules for determining jurisdiction when a person is employed, self-employed or inactive. The rules laid down by the Regulation are exclusive, binding and superior to national legislation – both for the payment of insurance contributions and for the provision of benefits.
The coordination rules are primarily based on the principle of ‘lex loci laboris’, meaning that the legislation of the State in which the person is employed or self-employed is deemed to be the relevant legislation. There are special rules for persons employed in more than one State or employed in one State and self-employed in another, etc.
A person is subject to the legislation of only one Member State – Article 11(1) of Regulation (EC) No 883/04.
Employed and self-employed persons are subject, in principle, to the legislation of the Member State in which they pursue their employment or self-employment – Article 11(3)(a) of Regulation (EC) No 883/04.
Inactive persons and pensioners are subject to the legislation of the Member State of residence – Article 11(3)(e).
Employees whose employer posts to another Member State to perform work there on its behalf continue to be subject to the legislation of the posting Member State for a maximum period of 24 months. In this case, we are talking about ‘posting’. Similar provisions also apply to self-employed persons – Article 12 of Regulation (EC) No 883/04.
The determination of the one relevant legislation in cases where activities are pursued in two or more Member States is governed by Article 13 of Regulation (EC) No 883/04.
Two or more Member States, the competent authorities of these Member States or the bodies designated by these authorities may by common agreement provide for exceptions to Articles 11 to 15 in the interest of certain persons or categories of persons.
3) Aggregation of insurance periods – retention of rights during acquisition
The Regulation contains provisions ensuring that, in order to acquire the right to benefits, periods of insurance completed in other Member States should be taken into account where applicable, i.e. when deciding on a social security benefit, account is taken, where required, of previous periods of insurance, work or residence in other Member States.
4) Principle of exportability – waiving of residence rules
If you are entitled to a cash benefit from one country, generally, you may receive it even if you are residing in a different country. This is known as the principle of exportability (the possibility of transferring the entitlement to a benefit to another State).
Cash benefits due under the legislation of one or more Member States are not subject to any reduction, amendment or addition, suspension, withdrawal or removal based on the fact that the recipient or their family members reside in a Member State other than that in which the institution responsible for providing the benefits is situated.
5) Prevention of overlapping of benefits
Unless otherwise provided, the coordinating rules do not confer or maintain entitlement to several benefits of the same kind for one and the same period of compulsory insurance.