What does the UK’s departure from the European Union mean for citizens’ rights, travel and social security in Sweden?

More than three years after the UK voted to leave the European Union, the UK finally withdrew from the EU on the 31 of January 2020, ending its 47-year membership. From the 1 February, an 11-month transition period came into effect, resulting in largely minimal changes to the previous status quo through to the end of 2020. With only 11 months to negotiate a future relationship between the EU and UK, where does that leave UK citizens in Sweden? How does the UK’s departure from the EU affect their citizens’ rights, travel and social security?

The Transition Period

The UK’s departure from the EU signaled the end of 3 years of negotiations but not the end of Brexit. From the 1 February, as set out in the agreed Withdrawal Agreement (see more below), the UK entered a transition period binding the UK to EU law for a further 11 months until 31 December 2020.

During this period, the UK will remain a part of the EU customs union and single market, maintaining the previous status quo, including the right to live and work in the EU and UK (Freedom of Movement) and travelling to and from the UK and EU. This means that EU citizens wishing to work and reside in the UK, and vice versa, will continue to be able to do so as before, until the 31 December 2020. Travel will also remain largely undisrupted as valid passports and ID cards will continue to be accepted at the point of entry into the UK and EU. Social security rights remain unchanged, whereby coordination rules will be fully applicable for UK nationals in the EU as well as for EU nationals in the UK, until the end of 2020.

The transition period does however signal the end of the UK’s membership of the EU’s political institutions, including the European Parliament and European Commission. As such, the UK will no longer have any voting rights however it will need to continue following EU rules.

As set out in the Withdrawal Agreement, this transition period is necessary to minimize the disruptions caused by Brexit whilst new negotiations take place to discuss the future relationship.

As things stand today, at the end of the transition period there are three possible outcomes:

1 – A UK-EU new deal comes into effect

2 – The UK exits the transition with no deal

3 – The transition period is extended whilst negotiations continue

Whilst the future relationship between the UK and EU is uncertain, the orderly departure of the UK from the EU, through the Withdrawal Agreement, does however provide some certainty and protection when it comes to citizens’ rights, travel and social security.   

The Withdrawal Agreement

After more than three years of negotiations and two extensions (10-month delay) to the original Brexit day, the New Withdrawal Agreement (simply dubbed the Withdrawal Agreement) agreed between the EU and UK was signed on the 24 January and ratified by the EU Parliament on the 29 January. This marked the “orderly” withdrawal of the UK from the EU on the 31 January 2020 and the beginning of the 11-month transition period.

The Withdrawal Agreement stipulates the terms on the UK’s departure from the EU covering, among other things, the divorce bill, citizens’ rights and the much controversial Ireland and Northern Ireland border.

Citizens’ Rights

Part Two of the Withdrawal Agreement protects EU citizens in the UK, and UK citizens in other EU countries, as well as their families. According to its provisions, all citizens’ rights will be guaranteed throughout their lifetime. All relevant administrative procedures must be transparent, smooth and streamlined. The implementation and application of these terms will be overseen by an independent authority with powers equivalent to those of the European Commission.

In accordance with Article 18 of the Withdrawal Agreement, UK nationals, who arrived in an EU member state before the end of the transition period and intend to reside in that member state after 31 December 2020, may be requested to apply for a new immigration status in their member state of residence.

In Sweden, the government will introduce an application process for residency status, built on the terms set out in the Withdrawal Agreement. This will provide a path to permanent residency for UK nationals who are legally resident in Sweden, now or at any time up to 31 December 2020. The Swedish government is yet to announce a timeline, however under the terms of the Withdrawal Agreement, UK citizens in the EU will have until at least 30 June 2021 to apply for permanent residency.

In the UK, the government introduced the EU Settlement Scheme in March 2019, granting settled status to EU citizens residing in the UK for five or more years or pre-settled status for those who did not yet reach five years, allowing them to apply for settled status later.

Citizens’ rights continue to be the EU’s main priority and concern when it comes to the UK’s departure, with the EU pressing for assurances on documentation proving status and ensuring that there will be no automatic deportation of EU citizens that have not yet applied (instead they will have the possibility to have their case heard and obtain settled status).

Travel between the UK and EU member states

Entry rules to the UK for EU citizens and to the EU for UK citizens (non-residents) will fall outside of scope of the Withdrawal Agreement. As a result, whilst travel to the UK and the EU for respective citizens will remain largely unaffected during the transition period, post 31 December 2020, travel requirements will be subject to the national regulations of each country (or the Schengen Agreement for EU participating countries).

With the introduction of the European Travel Information and Authorization System (ETIAS) scheduled for 2021, it is possible that UK citizens travelling to any of the EU 27 countries post Brexit will need to apply for pre-travel authorization through ETIAS just like they do today when travelling to US through ESTA. Passports will also need to be valid for a least 6 months, as opposed to just simply holding a valid passport today, at the time of travel to be granted entry.

Other considerations may be required subject to the negotiations between the EU and UK on the future relationship.

Social Security

According to the provisions of the Withdrawal Agreement all social security rights under EU law will be maintained. The current social security coordination rules will therefore continue to apply even after the end of the transition period. According to Article 30 of the Withdrawal Agreement this will be applicable for covered persons provided that the individual remains without interruption linked to the UK and any one of the EU 27 member states.

For example, a UK national working in Sweden for a Swedish employer before the end of the transition period will remain covered by Swedish social security after 31 December 2020 and have the same rights to healthcare etc. in Sweden and in the UK as before. The UK national will also be able to use the European Health Insurance Card during holidays in the European Union. Furthermore, if the UK national has children living in the UK and provided the UK national is entitled to Swedish family benefits, these benefits can still be exported to the UK without any reduction.

However, when the “cross border link” ceases to exist, the individual will no longer be covered by the full social security coordination rules. For instance, the cross-link connection would be interrupted if the UK national from the example above, should end his/her employment in Sweden and move back to the UK after the transition period has ended. In such cases, the Withdrawal Agreement does make provisions whereby past periods of insurance, employment, self-employment and/or residence in Sweden or any other member state, can still be accounted for to fulfill conditions under UK national legislation.

Individuals who are not in a cross-link situation at the end of the transition period will not be protected under the Withdrawal Agreement. In terms of social security rules for these individuals, the UK will be treated as a third country. As a result, national social security legislation will most likely apply in cross border situations between UK and other member states (Sweden included). This could lead to employer registration obligations as well as reporting obligations in both the UK as well as in the other member states. There is also a risk that social security contributions, both the employer and employee part, will be due in more than one country. This will also affect the period during which an employee can be assigned from an employer to another country and remain covered by the social security system in the home country. For example, a UK national going on assignment to Sweden, has been able to remain covered by the UK social security system up to five years. If national legislation should apply instead this period will be reduced to a maximum of 12 months.

What happens after the Transition Period ends

With negotiations on the future relationship set to begin in March 2020, it is yet uncertain how things will change post the 11-month transition period. There could effectively be an extension, which would need to be agreed by both the EU and UK by no later than 1 July 2020, however the UK government has ruled this out making its removal legislative from the final Withdrawal Agreement Bill.

As such from 31 December 2020, unless future negotiations say otherwise, the UK will become a third country. Work and residence permits will likely be the default requirement for UK citizens wishing to work and reside in any one of the remaining 27 EU member states, Sweden inclusive. The same will apply for EU citizens wishing to reside in the UK post Brexit, with the UK government looking to introduce an Australian style points-based immigration system. As a result, whilst travel to the UK and the EU for respective citizens will remain largely unaffected during the transition period, post 31 December 2020, travel requirements will be subject to the national regulations of each country (and the Schengen Agreement for EU participating countries).

For social security, and especially for those individuals who will fall outside of the scope of the Withdrawal Agreement, national legislation will most likely be the default position post Brexit. As a result, reporting and registration obligations for UK employers in Sweden as well as for Swedish employers in the UK will increase. This will also affect the length UK employees and Swedish employees can be assigned to Sweden from the UK and vice versa. Any future negotiation on a new agreement to social security coverage between Sweden and the UK could mitigate most of these issues. However, this agreement could take years to complete.

One thing is certain, the 31 December 2020 will effectively mark the end of free movement.

EY will be hosting a seminar to discuss the impacts of Brexit on citizens’ rights, travel and social security. More information on this will follow soon.

José Vaz and Karolina Engström

 

Contact
José Vaz
+46 70 148 13 25

 

Contact
Karolina Engström
+46 76 853 23 78