Regulation 883/2004 is the main instrument dealing with the coordination of the social security systems within the European Economic Area. One of its most important chapters concerns the determination of the applicable social security legislation in cases with a cross-border element.
Context
Modernisation of the rules for EU social security coordination has taken place in different phases. Therefore, several transitional periods should be taken into account in determining the applicable legislation.
Moreover, the Belgian social security authorities very recently issued a policy statement on the interpretation of the term “marginal activities”, i.e. activities which should not be taken into account for determining the applicable social security legislation, known as “the 5% rule”.
Transitional periods
Due to the phased shift from Regulation 1408/71 to Regulation 883/2004 for different countries and different categories of individuals, 5 transitional periods, during which the old rules can still apply, have started to run. All transitional periods concern a maximum period of 10 years. They can only be ended by an explicit request to apply the new rules or by a change in the relevant situation.
The five transitional periods run:
1. from 01/05/2010: for EU citizens
2. from 01/01/2011: for non-EU nationals
3. from 01/04/2012: for Switzerland
4. from 01/06/2012: for Iceland, Liechtenstein and Norway
5. from 28/06/2012: for the recent changes with regard to simultaneous employment (see Laga newsflash – 15 June 2012) and for aircrew members
Marginal activities
When determining the applicable legislation, the concept of “marginal activities” is important to establish whether the general “work state rule” (i.e. the legislation of the country where activities are performed is applicable) or the specific rules on simultaneous employment should be applied. Marginal activities are permanent activities which are insignificant in terms of time and economic return. As an indicator, activities accounting for less than 5% of the worker’s regular working time and/or less than 5% of his overall remuneration should be regarded as marginal.
The Belgian social security authorities have now decided that, as a starting point, this 5% rule will be separately applied for each country. Smaller percentages in different countries will not be aggregated to reach this threshold.
It should however be added that the 5% rule is not a uniquely decisive factor (e.g. the nature of activities can also be taken into account) and the Belgian social security authorities will always assess each case individually.
Our recommendations
Employers should carefully consider the different transitional periods in order to apply the correct social security legislation, under either new or old rules.
The 5% rule should be kept in mind when assessing the difference between “negligible business trips” and genuine simultaneous employment in several countries.The coordination rules for simultaneous employment can only be applied if the employee performs a minimum of 5% of his activities in at least one country other than that where the main activity takes place. If not, the “work state rule” applies.
