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GES Switzerland NewsFlash – International Social Security

Switzerland – EU: New social security legislation for internationally mobile employees

17. February 2012

Executive Summary

As from 1st April 2012, the EU Regulations 883/2004 and 987/2009 will apply in the relations between Switzerland and the EU Member States regarding the coordination of social security schemes.

These Regulations will replace the current Regulations no 1408/71 and 574/72 for EU Member States.

Regulations no 1408/71 and 574/72 remain however applicable in the relations between Switzerland and the EFTA Member States (Iceland, Liechtenstein and Norway).

Thus, as from 1st April 2012, the EU/CH regime for the coordination of social security schemes will be affected.

Basics – Key Changes

Short term assignments: an employee assigned from one EU state to another for a period of up to 2 years (previously up to 1 year) is required to remain insured in their home country.

Multi-state workers: previously, a person working partly in the country in which he/she is habitually resident paid contributions in that country. Under the new rules such an individual has to ‘pursue a substantial part of his activity’ (at least 25% of work time and/or remuneration) in the home country for this to apply. This will affect CH employees who may be based in another EU country and spend only a small amount of time working in CH, and multi-state employees who are employed by companies based in a country other than that in which they normally live.

Long term assignments: despite the new rules the possibility to apply for a longer period (generally up to 5 years) for which an intervention from the host country authorities is required should however remain in place and where is it in the individual’s best interests to do so.

Self-employed activity: Individuals employed in one state and self-employed in another will no longer pay contributions in both states. Under the new rules they will only pay where they are employed.

Collection of contributions: Authorities in different states will help each other collect unpaid contributions from employers who do not have a presence in the state where the contributions are payable.

Applications

  • The E101 certificate will be replaced by a new form A1.
  • From 1 April, all applications will be considered first under the new provisions.
  • Employees with E101s issued under the old rules which are valid beyond 1 April can opt for the new rules to apply to them if they wish.
  • Multi-state worker applications will have to be made to the authorities in the state where the individual is habitually resident.

Healthcare

Important changes with respect to Healthcare are expected to come into force together with the new Regulations. These might especially affect cross-border commuters and retired individuals. Clear guidelines in this respect are expected to be issued soon.

Recommendation

The new Regulations may require revising the social security situation of the employees as well as the assignees, which could result in the revision of employer policies in this respect. More detailed guidelines are expected in due course.

Any Questions?

If you have any questions concerning the issues in this GES Switzerland NewsFlash, please contact us.

Contacts

Name:
Tony Brey
Company:
+41 (0)58 279 63 25
Job Title:
Phone:
Email
tbrey@deloitte.ch
Name:
Desiree Bollinger
Company:
+41 (0)58 279 63 46
Job Title:
Phone:
Email
debollinger@deloitte.ch
Name:
Dirk Hangarter
Company:
Partner, Tax
Job Title:
Phone:
+41 (0)58 279 63 35
Email
dhangarter@deloitte.ch
Name:
Roberto Orsi
Company:
Partner, Tax
Job Title:
Phone:
+41 (0)58 279 82 08
Email
rorsi@deloitte.ch
Name:
Patrick Couasnon
Company:
Legal Services
Job Title:
Director
Phone:
+41 (0)58 279 80 73
Email
pcouasnon@deloitte.ch
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