A—List of articles—Foreign element – coordination of social systems

Foreign element – coordination of social systems

31. 10. 2024

Coordination of social security

Freedom of movement, residence, and settlement belongs to the basic principles of the European Union (EU). EU citizens have the possibility to work in any member country of the EU, and individual EU countries must treat these citizens as their own.

Since social security policies vary from one state to another, there is a necessity for coordination of national social systems to prevent disadvantages of migrating citizens. However, the rules of coordination do not replace and do not change domestic schemes of the member countries, which still have the right to decide on the conditions of insurance and payment of benefits.

Coordination rules apply for EU countries, Iceland, Lichtenstein, Norway, and Switzerland.

Whether and to what extent the coordination regulations are still used for the citizens of the United Kingdom of Great Britain and Northern Ireland, who are considered inhabitants of third countries from 1.1.2021, results from the Agreement of the exit of the United Kingdom from the European Union and the European Atomic Energy Community (2019/C 384 I/01).

Coordination of social security is established on four basic principles:

The principle of equal treatment – migrating person has the same rights and obligations as the citizens of a given country
The application of the single-country legal system principle – a migrating person cannot come under legislation of more than one country or not be insured at all. The legislation used for the person is the legislation of the country where the person is employed or self-employed.
The principle of insurance accumulation – if the person spends a part of his/her professional life in one country and another part in another country, insured time periods are accumulated.
The preservation of acquired rights principle – social security benefits can be paid to the rightful person even outside of the state where the claim originates and that is to the state where the person resides

Foreign fathers and mothers in the Czech Republic

Determination of relevant country for benefits payment

The increase in cases with some sort of foreign element is related to the aforementioned freedoms. The most common foreign element is the performance of a gainful activity abroad or a family member residing abroad. In these cases, it is necessary to decide which country is responsible for paying the benefits. The cases are not assessed according to the benefit requester's situation only but in relation to the situation of the whole family. The essential benefits paid in connection with motherhood and parenthood are maternity allowance and parental allowance.

Maternity allowance / Maternity benefit (or PPM = peněžitá pomoc v mateřství)

Maternity allowance falls under sickness insurance benefits, hence the entitlement to this benefit claim is connected to participation in a sickness insurance scheme. If the person fulfils conditions set by law (more information in the chapter “Sickness benefit”, “Maternity allowance (PPM)” and “Compensatory Benefit in Pregnancy and Maternity”), they are eligible for maternity allowance. Considering the principle of accumulated insurance periods, the time insured in another EU country is also counted in.

Example:

„Ms. Alexandra was employed in Germany for a couple of years. Since commuting proved to be demanding, she terminated her employment in Germany and found a new one in the Czech Republic. She found out that she was pregnant shortly thereafter. Ms. Alexandra did not fulfill the necessary criteria regarding the period of sickness insurance coverage (which amounts to 270 days in the past two years prior to the start of maternity allowance in the Czech Republic), but she fulfilled this condition after adding the period of sickness insurance in Germany. Thus, she can claim the maternity allowance.“

Family non-insurance benefits

Different rules apply to non-insurance benefits, where the entitlement is not dependent on previous participation in the insurance scheme. The situation of both parents is always assessed. Family non-insurance benefits in the Czech Republic include parental allowance (for more information on parental allowance, see the chapter “Parental allowance”) and child benefit (see the chapter “Child benefit and housing benefit”) in particular.

The following rules apply to their payout:

the primary responsible country is the country in which the gainful activity is carried out;
if no gainful activity is carried out in the family, the responsible country is the one that pays out pension benefits;
the last criterion is the place of residence.

If gainful activity takes place in multiple countries, the country of the child’s residence applies on the condition that one of the parents works in this country at the same time. Residence means the actual residence of the child, i.e. the place where they have the so-called center of interest (where they mostly stay and visit the doctor, etc.), so it is not about their permanent residence. The same criterion, i.e. the residence of the child, is decisive even if the claim arises simultaneously from several countries due to the payment of pensions or the place of residence.

Example:

„The child's mother is currently unemployed and takes care of the child in the Czech Republic. The child's father is employed in Austria. As the only gainful activity that takes place in the family is carried out in Austria, Austria is primarily responsible for the payment of family benefits (benefits similar to the Czech parental allowance). “

Example:

„The mother is on parental leave with her employer in the Czech Republic and takes care of the child at home, while the child's father is employed in Germany. Since gainful activity is carried out in both countries, the country of residence of the child will be the primary responsible country - in this case, it is the Czech Republic.“

If the primary country responsible for the payment of the benefit does not pay any similar family benefit, or if the amount of the said benefit is lower than the amount of the Czech parental allowance, the Czech Republic may be the secondary country responsible on the condition that the family is legally connected to the Czech Republic (e.g. by gainful activity). In such a case, the secondary country will pay a surcharge that corresponds to the difference between these benefits. This ensures that you receive the full amount of benefits to which you are entitled.

Even in specific scenarios where the Czech Republic is not the primary country responsible for the payment of family benefits, an application for parental allowance can be submitted in the Czech Republic, i.e. to the regional branch of the Labour Office of the Czech Republic. The labour office is obliged to accept the application even in such a case and, if necessary, forward it to the relevant foreign institution.