A practical guide on the ‘Habitual Residence Test’ to help Member States apply EU rules on the coordination of social security for EU citizens that have moved to another Member State has just been published by the European Commission. The new guide gives more clarity about the EU ‘Habitual Residence Test’ and will facilitate its application in practice by Member States’ authorities.
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The guide, drafted in cooperation with Member States, clarifies the separate concepts of ‘habitual residence’ and ‘temporary residence’ or ‘stay’. These definitions, laid down in EU law (Regulation EC/883/2004 as last amended by Regulation EU/465/2012), are necessary to establish which Member State is responsible for the provision of social security benefits to EU citizens moving between Member States. Under EU law there can be only one habitual place of residence and so only one Member State responsible for paying residence-based social security benefits.
Employees and the self-employed qualify for social security in the country where they work and non-active people (e.g. pensioners, students) qualify in the Member State where they are “habitually resident”. Determining a person’s Member State of “habitual residence” is also important for workers that work in more than one Member State.
The guide recalls the specific criteria to be taken into account to determine a person’s place of ‘habitual residence’ such as:
- family status and family ties
- duration and continuity of presence in the Member State concerned
- employment situation (in particular the place where such activity is habitually pursued, the stability of the activity, and duration of the work contract)
- exercise of a non-remunerated activity
- in the case of students, the source of their income
- how permanent a person’s housing situation is
- the Member State where the person pays taxes
- reasons for the move
- the person’s intentions based on all the circumstances and supported by factual evidence.
Other facts may also be taken into account if relevant.
The guide also provides concrete examples and guidance on cases in which the determination of the place of residence can be difficult, such as frontier workers, seasonal workers, posted workers, students, pensioners, and highly mobile inactive people.
For example, if a UK national retires to Portugal and spends most of their time in Portugal, their place of ‘habitual residence’ is now Portugal even if they still own a house in the UK and maintain cultural and economic ties to the UK.
Background
The ‘habitual residence’ guide is part of a broader handbook intended to assist institutions, employers and citizens to determine which Member State’s social security legislation should apply in specific circumstances. The handbook also clarifies rules that apply to posted workers and to people working in two or more Member States, including rules applicable to transport workers, in particular to flight and cabin crew members.
The publication of the practical guide on the habitual residence test constitutes one of the five actions announced in the Communication on “Free movement of citizens and their families” of 25 November. The guide is now available on the website of the European Commission in English (see below), and will be translated into all EU official languages in the coming weeks.
The amended guide was endorsed by the Administrative Commission for the Coordination of Social Security Systems on 18 December 2013. This body comprises representatives of all Member States and is responsible for interpreting issues arising from the application of the social security rules laid down in Regulation EC/883/2004.
Legislation that applies to workers in the EU,the EEA and Switzerland - practical guide
