EXPLANATORY MEMORANDUM TO THE SOCIAL SECURITY (RECIPROCAL AGREEMENTS) (MISCELLANEOUS
AMENDMENTS) (EU EXIT) REGULATIONS 2021
2021 No. [XXXX]
1. Introduction
1.1 This explanatory memorandum has been prepared by the Department for Work and
Pensions (DWP) and is laid before Parliament by Act.
1.2 This memorandum contains information for the Joint Committee on Statutory
Instruments, the Select Committee on Statutory Instruments and the Sifting
Committees.
2. Purpose of the instrument
2.1 This instrument corrects deficiencies in UK legislation following the end of the
transition period in areas of DWP policy. It aligns the statute book with certain
arrangements which are already set out in international agreements, and removes
certain redundant provisions, so providing legislative clarity, with some savings
provisions where appropriate.
Explanations
What did any relevant EU law do before exit day?
2.2 The impact of the relevant EU law before exit day is set out in section 7 of this
memorandum. These regulations reflected in domestic law, the UK’s obligations
under EU law whilst a member state of the EU.
Why is it being changed?
2.3 The proposed regulations will align our domestic regulations with the position
following EU exit, as set out in section 7 of this memorandum. Regulations 2, 3, 4, 5
and 6 (except from 2(2)(iv)) tidy up UK domestic legislation to align this with the
position under the UK’s new social security arrangements with the EU, European
Economic Area (EEA) European Free Trade Area (EFTA)1
states and Switzerland, as
detailed in section 6. Regulation 2(2)(iv) restores the social security position, which
was in place immediately before exit day, for individuals in scope of the Convention
on Social Security between the UK and Ireland2
, for the purpose of Winter Fuel
Payment. Regulation 7 repeals retained EU law, related to transfer rights of certain
accrued state benefits, for employees of certain EU institutions, in line with the
ending of free movement between the UK and the EU.
What will it now do?
2.4 The impact of the proposed regulations is set out in section 7 of this memorandum.
1 The EEA EFTA states are Iceland, Liechtenstein and Norway
2https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/778087/
CS_Ireland_1.2019_Soc_Sec.pdf
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3. Matters of special interest to Parliament
Matters of special interest to the Sifting Committees
3.1 This instrument is being laid for sifting by the Sifting Committees.
Matters relevant to Standing Orders Nos. 83P and 83T of the Standing Orders of the House
of Commons relating to Public Business (English Votes for English Laws)
3.2 As the instrument is subject to negative resolution procedure there are no matters
relevant to Standing Orders Nos. 83P and 83T of the Standing Orders of the House of
Commons relating to Public Business at this stage.
4. Extent and Territorial Application
4.1 The territorial extent of regulations 5, 6 and 7 is the United Kingdom. The territorial
extent of regulations 2, 3 and 4 is England and Wales and Scotland.
4.2 The territorial application of regulations 5, 6 and 7 is the United Kingdom. The
territorial application of regulations 2, 3 and 4 is England and Wales and Scotland.
5. European Convention on Human Rights
5.1 The Minister for Disabled People, Health and Work at the Department for Work and
Pensions, Justin Tomlinson has made the following statement regarding Human
Rights:
“In my view regulation 7 of the Social Security (Reciprocal Agreements)
(Miscellaneous Amendments) (EU Exit) Regulations 2021, which revokes provisions
of EU Council Regulation (EEC, Euratom, ECSC) No 259/68, is compatible with the
Convention rights.”
5.2 As regulations 2, 3, 4, 5 and 6 of the Social Security (Reciprocal Agreements)
(Miscellaneous Amendments) (EU Exit) Regulations 2021 do not amend primary
legislation or retained EU law and the instrument is subject to the negative procedure,
no statement is required in respect of those provisions.
6. Legislative Context
6.1 The UK’s arrangements on social security with the EEA and Switzerland are now
governed by the Withdrawal Agreement3
(and parallel agreements with EEA EFTA
states4
and Switzerland5
), the Trade and Cooperation Agreement6
for the EU, and UKIreland Convention on Social Security between the UK and Ireland. The UK is in the
process of negotiating arrangements with the EEA EFTA States and separately with
3https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/840655/Agre
ement_on_the_withdrawal_of_the_United_Kingdom_of_Great_Britain_and_Northern_Ireland_from_the_Europ
ean_Union_and_the_European_Atomic_Energy_Community.pdf
4 EEA EFTA Separation Agreement – https://www.gov.uk/government/publications/eea-efta-separationagreement-and-explainer
5 Swiss Citizens’ Rights Agreement – https://www.gov.uk/government/publications/swiss-citizens-rightsagreement-and-explainer
6https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/948119/EUUK_Trade_and_Cooperation_Agreement_24.12.2020.pdf
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Switzerland similar to those in place under the Trade and Cooperation Agreement7
with the EU.
6.2 The Social Fund Winter Fuel Payment Regulations 20008 were made in the context of
the UK being a member of the EU, to fulfil the UK’s obligations under Regulation
(EC) No 883/20049
.
6.3 The Transfer of State Pensions and Benefits Regulations 200710 and the Social
Security (Application of Reciprocal Agreements with Australia, Canada and New
Zealand) (EEA States and Switzerland) Regulations 201511 were made under section
2(2) of the European Communities Act 1972 in compliance with the UK’s European
treaty obligations.
6.4 The European Network of Employment Services (EU Exit) Regulations 201812 relate
to the European Union Programme for Employment and Social Innovation. As such,
these regulations relate to the EEA.
6.5 The regulations listed in 6.2, 6.3 and 6.4 are EU derived domestic legislation. The
European Union (Withdrawal) Act (EUWA) 201813 repeals the European
Communities Act 197214 but section 2 saves EU-derived domestic legislation so that
it continues to have effect in domestic legislation on or after exit day. These
regulations are, therefore, retained EU law under section 6(7) of EUWA 2018.
6.6 Regulation (EEC, Euratom. ECSC) No 259/6815 of the Council of 29 February 1968,
laying down the Staff Regulations of Officials of the European Union and Conditions
of Employment of Other Servants of the European Union referred to in regulation 7,
is an EU regulation which had direct effect immediately before the implementation
period completion date and is, therefore, direct EU legislation under EUWA 2018.
Section 3 of EUWA 2018 provides that direct EU legislation forms part of domestic
law after the implementation period completion date. This EU Council regulation is
therefore, retained EU law under section 6(7) of EUWA 2018.
6.7 There are deficiencies in the operation of these provisions of retained EU law, as
detailed in section 7, which this instrument corrects pursuant to the power in section 8
of EUWA 2018. In addition, the articles being omitted are expressly referenced in
7https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/948119/
EU-UK_Trade_and_Cooperation_Agreement_24.12.2020.pdf
8 Regulations – https://www.legislation.gov.uk/uksi/2000/729/pdfs/uksi_20000729_310518_en.pdf
9 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02004R0883-20140101&from=EN
10 Regulations – https://www.legislation.gov.uk/uksi/2007/1398/pdfs/uksi_20071398_301114_en.pdf
Explanatory memorandum – https://www.legislation.gov.uk/uksi/2007/1398/pdfs/uksiem_20071398_en.pdf
11 Regulations – https://www.legislation.gov.uk/nisr/2015/281/pdfs/nisr_20150281_en.pdf
Explanatory memorandum – https://www.legislation.gov.uk/uksi/2015/349/pdfs/uksiem_20150349_en.pdf
12 Regulations – https://www.legislation.gov.uk/uksi/2018/1283/pdfs/uksi_20181283_en.pdf
Explanatory memorandum – https://www.legislation.gov.uk/uksi/2018/1283/pdfs/uksiem_20181283_en.pdf
13 https://www.legislation.gov.uk/ukpga/2018/16/pdfs/ukpga_20180016_en.pdf
14 https://www.legislation.gov.uk/ukpga/1972/68/pdfs/ukpga_19720068_en.pdf
15 Council Reg 259 is retained EU legislation that is now part of UK domestic law pursuant to section 3 of
EUWA 2018, and regulation 6 of the proposed regulations amends this UK domestic law. As there is not yet an
established citation to Council Reg 259 as it exists in UK domestic law, text of Council Reg 259 as it exists in
EU law can be found at the following citation and link but the text of the EU law cannot be relied upon as
accurately reflecting UK domestic law as the EU text could include amendments made after the UK’s exit that
are not part of UK domestic law. Council Regulation (EEC, Euratom, ECSC) No 259/68 (OJ L 56, 4.3.1968), as
last amended by Council Regulation (EC, Euratom) No 1023/13 of 22/10/2013. See http://eurlex.europa.eu/legal-content/EN/TXT/?qid=1488382707485&uri=CELEX:01962R0031-20170101
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Article 114 of the Withdrawal Agreement, and are therefore recognised and available
in UK domestic law for the purposes outlined in Article 114 pursuant to section 7A
EUWA 2018.
7. Policy background
The Social Fund Winter Fuel Payment Regulations 2000
7.1 Winter Fuel Payments (WFPs) were introduced as part of the government’s initiative
to tackle fuel poverty amongst pensioners and is a lump sum paid each winter to
individuals who have reached state pension age and are ordinarily resident in Great
Britain in the qualifying week in September (equivalent provisions cover Northern
Ireland). Under the EU social security coordination regulations (Regulation (EC) No
883/2004) individuals who met the qualifying conditions for WFPs, and had a
genuine and sufficient link to the UK, could receive the payment if they were
habitually resident in a EEA state or Switzerland in the qualifying week. This was
restricted in 2015 to only those EEA states or Switzerland with an average winter
temperature equal to, lower than, or close enough to be statistically equivalent to, the
warmest winter area of the UK.
7.2 The Trade and Cooperation Agreement with the EU states at Annex SSC-1, Part 3(i)
that WFPs are not in scope of this agreement. As a result, the UK will not pay WFPs
to people who reside in the EU unless they are in full scope of the EU Withdrawal
Agreement or parallel agreements with the EEA EFTA states and Switzerland, and
have a genuine and sufficient link to the UK. Regulation 2(2)(i)-(iii) of the proposed
regulations tidies up references in the Social Fund Winter Fuel Payment Regulations
2000 to align them with the position under these agreements.
7.3 The UK will also continue to pay WFPs to beneficiaries of the UK-Ireland
Convention on Social Security, namely UK and Irish nationals who are habitually
resident in Ireland, who have a genuine and sufficient link to the UK. Regulation
2(2)(iv) of the proposed regulations amends the Social Fund Winter Fuel Payment
Regulations 2000 to align these domestic regulations with this position.
The Social Security (Application of Reciprocal Agreements with Australia,
Canada and New Zealand) (EEA States and Switzerland) Regulations 2015
7.4 The social security reciprocal agreements with Canada16, New Zealand17, and the
former agreement with Australia18, include provisions applying to persons resident in
the United Kingdom who had previously been resident in the named country. These
specify that, for the purpose of calculating entitlement to a retirement pension in the
United Kingdom, legislation mentioned in the agreements is modified so that those
persons are treated as if they (or, in some cases their spouse) had paid national
insurance contributions in the United Kingdom during the periods in which they were
resident in Australia, Canada or New Zealand. The agreement with New Zealand also
16 S.I. 1995/2699, Social Security (Canada) Order 1995 –
https://www.legislation.gov.uk/uksi/1995/2699/pdfs/uksi_19952699_301114_en.pdf
17S.I. 1983/1894, Social Security (New Zealand) Order 1983 –
https://www.legislation.gov.uk/uksi/1983/1894/pdfs/uksi_19831894_310515_en.pdf
18 S.I. 1992/1312, Social Security (Australia Order) 1992 –
https://www.legislation.gov.uk/uksi/1992/1312/pdfs/uksi_19921312_301114_en.pdf
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contains similar provisions for widows and orphans benefits, and the former agreement
with Australia contains similar provisions for widows benefits.
7.5 The Australia Order was revoked in 2001, with saving provisions for individuals
with periods of residence in Australia prior to 1 March 2001, and those saving
provisions continue to have effect to the extent provided for by virtue of section 299 of
the Pensions Act 200419
.
7.6 The 2015 Regulations set out how the provisions of the agreements with Canada,
New Zealand and Australia, noted above, relate to persons who (a) are an EEA citizen
(inclusive of UK, at the time) or Swiss national, (b) fall within the personal scope of
Regulation (EC) No 1408/7120 or Regulation (EC) No 883/2004 on the coordination of
social security systems, otherwise known as the “EU SSC Regulations”, (c) are
habitually resident in an EEA State or Switzerland and (d) have a genuine and
sufficient link to the UK. This means that a UK national, EEA citizen or Swiss national
who retired in the EEA or Switzerland after a period of residence in, for example New
Zealand, could benefit from the provisions when calculating their UK State Pension.
This was as a result of the EU Commission taking the position that the requirement for
a beneficiary to be resident in the UK imposed a restriction on a citizen’s free
movement rights.
7.7 Following the end of the transition period, free movement has ended and new
arrangements for social security coordination are in place under the Trade and
Cooperation Agreement with the EU. Regulation 4(1) of the proposed regulations will
therefore revoke the Social Security (Application of Reciprocal Agreements with
Australia, Canada and New Zealand) (EEA States and Switzerland) Regulations 2015.
This will align the position with that of persons retiring to countries outside of the EEA
or Switzerland.
7.8 Savings provisions are included at Regulation 4(2) of the proposed regulations
for individuals resident in an EEA state or Switzerland on 31 December 2021, while
they remain resident in that state. This will mean that individuals resident in the EEA or
Switzerland, already receiving a UK State Pension which is partially based on years of
residence in the named country, or an individual resident in the EEA or Switzerland by
31 December 2021 yet to claim their UK State Pension but which would be partially
based on years of residence in the named country when they come to claim it, would
not be impacted while they continue to reside in that state, or if they return to the UK.
This was announced here on 30 April 2021. These provisions never extended to
individuals who were not EEA or Swiss citizens, so those citizens from so-called “third
countries” will see no change.
7.9 Regulation 3(3) of the proposed regulations will amend the Social Security
(Application of Reciprocal Agreements with Australia, Canada and New Zealand)
(EEA States and Switzerland) Regulations 2015 to clarify that the savings provisions
apply to UK nationals, as well as EEA citizens and Swiss nationals, now that EEA
citizens no longer includes UK nationals. In addition to replacing the reference
Regulation (EC) No 883/2004 with references to the EU Withdrawal Agreement, or
equivalent agreements with the EEA EFTA states or Switzerland regulation 3(4) of the
proposed regulations will also insert a reference to the Trade and Cooperation
Agreement, to ensure that the provisions will extend to UK nationals who move to the
19 Pensions Act 2004 – https://www.legislation.gov.uk/ukpga/2004/35/contents
20 https://www.legislation.gov.uk/eur/1971/1408
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EEA or Switzerland between 1 January 2021 and 31 December 2021 and who are not
covered by the by Regulation (EC) No 883/2004 or 1408/71.
European Network of Employment Services (EU Exit) Regulations 2018
7.10 Regulation 3 of The European Network of Employment Services (EU Exit)
Regulations 2018 was a contingency measure should the UK have left the EU without a
withdrawal agreement, which saved Council Regulation (EC) No 1296/201321 of the
European Parliament and of the Council, of 11 December 2013 on a European Union
Programme for Employment and Social Innovation (“EaSI”), for the purposes of
providing grants to existing grantees should the European Commission have refused to
provide this post “exit day”. This gave a discretionary power to the Secretary of State to
give financial provision to a person who had a grant agreement under the Employment
and Social Innovation fund had the European Commission declined to make further
payments. Under the EU Withdrawal Agreement the European Commission committed
to honouring all such payments. Regulation 3 is therefore no longer needed and is being
revoked by regulation 5 of the proposed regulations.
Transfer of State Pensions and Benefits Regulations 2007
7.11 EU Council Regulation (EEC, Euratom, ECSC) No 259/68 (Council Reg 259)
outlines the employment rights and benefits of individuals employed by certain EU
institutions. These individuals can request to have the capital value of their rights
accrued to certain state benefits (through their national insurance contributions in the
case of the UK) transferred from an EU member state to the Pension Scheme of the
European Union institutions in order to receive additional credit under the scheme.
Section 3 of EUWA 2018 converted Council Reg 259 into “retained direct EU
legislation” which was incorporated into UK law at the end of the transition period. The
Transfer of State Pensions and Benefits Regulations 2007 set out the UK’s
administrative process for applying for, calculating, and making the transfer, as well as
preventing transferred rights from providing future contributory benefit entitlement to
the transferor in the UK State scheme.
7.12 Article 114 of the EU Withdrawal Agreement (Article 114) provides for the
continuation of the UK’s obligations, as they were immediately before the end of the
transition period, with respect to the transfer rights of individuals who had commenced
employment with certain EU institutions before the end of the transition period. Section
7A EUWA 2018 ensures that, where it is necessary to continue to apply directly
applicable EU law under the Withdrawal Agreement, that legislation will form part of
domestic law. The relevant Council Reg 259 Articles 11, 12, 39, 109, and 135 relating
to transfer rights (Relevant Articles) are expressly referenced in Article 114, and are
therefore recognised and available in UK domestic law for the purposes outlined in
Article 114 pursuant to section 7A EUWA 2018.
7.13 Regulation 6 of the proposed regulations omits the ambulatory provision in
regulation 1(2A) of the Transfer of State Pensions and Benefits Regulations 2007.
Although no longer connected with EU changes to Council Reg 259 as of the end of the
transition period, this ambulatory provision is being omitted because it is no longer
needed as the regulations are saved as they were at the end of the transition period.
21 https://www.legislation.gov.uk/eur/2013/1296/contents
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7.14 Regulation 7 of the proposed regulations omits the Relevant Articles to the extent
they form part of UK domestic law pursuant to section 3 EUWA 2018, eliminating a
parallel set of the Relevant Articles in domestic law. This will leave only the Relevant
Articles in UK domestic law for purposes of Article 114. Identifying language has been
included in the regulation to ensure only the articles that form part of UK domestic law
pursuant to section 3 EUWA, as distinguished from the articles that form part of UK
domestic law pursuant to section 7A EUWA 2018, are omitted. This change
definitively ends transfer rights under the Transfer of State Pensions and Benefits
Regulations 2007, as outlined above, for employees who are not within the scope of
Article 114, as the UK is no longer a member state of the EU.
8. European Union (Withdrawal) Act/Withdrawal of the United Kingdom from the
European Union
8.1 This instrument is being made using the power in section 8 of the EU (Withdrawal)
Act 2018 in order to address failures of retained EU law to operate effectively or other
deficiencies arising from the withdrawal of the United Kingdom from the European
Union. In accordance with the requirements of that Act the Minister has made the
relevant statements as detailed in Part 2 of the Annex to this Explanatory
Memorandum.
9. Consolidation
9.1 This instrument does not involve consolidation and there are no plans to consolidate
the relevant legislation at this time.
10. Consultation outcome
10.1 No formal consultation has taken place for these regulations as they are making
technical amendments in consequence of EU exit.
10.2 The Social Security Advisory Committee (SSAC) have been consulted on the
proposed Regulations. Drafts have been shared with the Scottish Government and
Northern Ireland Executive.
11. Guidance
11.1 DWP will be producing operational guidance for staff on the legislative changes as a
result of these regulations.
11.2 Guidance for UK nationals in the EU, EEA and Switzerland on changes resulting from
EU Exit in areas of DWP policy can be found here.
11.3 Notice of the changes to The Social Security (Application of Reciprocal Agreements
with Australia, Canada and New Zealand) (EEA States and Switzerland) Regulations
2015 was provided for on 30 April 2020 here.
12. Impact
12.1 There is no, or no significant, impact on business, charities or voluntary bodies.
12.2 There is no, or no significant, impact on the public sector.
12.3 An Impact Assessment has not been prepared for this instrument because no impact
on business is foreseen. The changes are auxiliary to changes for which an impact
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assessments have already been published under the Immigration and Social Security
Co-ordination Act 202022
.
13. Regulating small business
13.1 The legislation does not apply to activities that are undertaken by small businesses.
14. Monitoring & review
14.1 As this instrument is made under the EU (Withdrawal) Act 2018, no review clause is
required.
14.2 This is a technical rectification and it is not foreseen that monitoring and evaluation
will be necessary
15. Contact
15.1 Liam Maher at the Department for Work and Pensions email:
eu.agreements@dwp.gov.uk, can be contacted with any queries regarding the
instrument.
15.2 Ronan O’Connor Deputy Director for International Strategy Division, at the
Department for Work and Pensions can confirm that this Explanatory Memorandum
meets the required standard.
15.3 Justin Tomlinson, Minister for Disabled People, Health and Work at the Department
for Work and Pensions can confirm that this Explanatory Memorandum meets the
required standard.
22 https://www.gov.uk/government/publications/immigration-bill-2020-overarching-documents/updatedimpact-assessment-for-eu-social-security-co-ordination-february-2021-accessible-version
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