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Headline Labour & Employment: The programme Act reinforces the fight against social security fraud in the frame of intra-community mobility

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As announced in our first Headlines of 2013, the Programme Act of 27 December 2012 contains new provisions aiming at the reinforcement of the fight against social fraud. One of these novelties is the anti-abuse provision against fraud in the frame of the European Regulation n°883/2004 on the coordination of social security systems. In the present Headlines, we will discuss this issue more in detail.

The European Regulation n°883/2004 determines which national social security system applies to persons moving within the European Economic Area (EEA). The guiding principle is that one is subject to the social security legislation of the country where one carries out his professional activity. However, a number of exceptions to this so-called ‘state-of-work’ principle exist. In this way, posted workers and self-employed persons who temporarily perform services in the state of work, remain subject to the social security system of the posting state, provided that certain conditions are fulfilled. Furthermore, there are specific rules for those who are pursuing a professional activity in two or more member states.

According to the Belgian social inspection services, these exceptions sometimes lead to the evasion of the application of the Belgian social security system. The fight against these abuses is difficult by reason of a combination of several factors. For instance, the posted worker or self-employed person receives an A1-form from the posting state as a proof of insurance in that state. According to the European Court of Justice, this A1-form is binding upon the Belgian inspection and courts, until the posting state withdraws this A1-form, as the case may be, at the request of the state of work. However, this A1-form is not always correct, a.o. due to abuses, and the cooperation with the competent authority of the posting state is not always that swift.

The Programme Act introduces a provision according to which the Belgian judge, an institution of social security, or a social inspection officer who comes across an ‘abuse’, can subject the concerned worker or self-employed person to the Belgian social security, if this system would have been applicable in the absence of any abuse. This is even possible before the withdrawal of the A1-form by the posting state. According to the Programme Act, there is an ‘abuse’ when ‘to a worker or self-employed person, the rules of the regulations on the coordination of social security systems are applied in a situation where the conditions determined by these regulations are not complied with, aiming at the evasion of Belgian social security legislation which should have been applied in case the aforementioned regulatory and administrative rules were correctly observed.” The entity which invokes the existence of an abuse, must prove that the person concerned had the intention to avoid the application of the Belgian social security system. Once this burden of proof is satisfied, the Belgian social security system applies as from the first day on which the conditions of its application were fulfilled, as the case may be, taking into account the statutes of limitation in social security matters.

The anti-abuse provision against social security fraud in the frame of intra-community mobility entered into force on 10 January 2013. However, it is questioned whether disregarding the A1-form in case of abuse, before its withdrawal by the posting state, does not violate European law. Therefore, this story is undoubtedly to be continued.