(14 January 2014) – A practical guide on the ‘Habitual Residence Test’ to help Member States apply EU rules on the coordination of social security for EU citizens that have moved to another Member State has just been published by the European Commission.
The guide, drafted in cooperation with Member States, clarifies the separate concepts of ‘habitual residence’ and ‘temporary residence’ or ‘stay’. These definitions, laid down in EU law, are necessary to establish which Member State is responsible for the provision of social security benefits to EU citizens moving between Member States. Under EU law there can be only one habitual place of residence and so only one Member State responsible for paying residence-based social security benefits.
Employees and the self-employed qualify for social security in the country where they work and non-active people (e.g. pensioners, students) qualify in the Member State where they are “habitually resident”. Determining a person’s Member State of “habitual residence” is also important for workers that work in more than one Member State.
The guide recalls the specific criteria to be taken into account to determine a person’s place of ‘habitual residence’ and also provides concrete examples and guidance on cases in which the determination of the place of residence can be difficult, such as frontier workers, seasonal workers, posted workers, students, pensioners, and highly mobile inactive people.
For example, if a UK national retires to Portugal and spends most of their time in Portugal, their place of ‘habitual residence’ is now Portugal even if they still own a house in the UK and maintain cultural and economic ties to the UK.