Unemployment insurance for cross-border commuters
In which country you must be insured and which country's unemployment insurance must pay benefits to you in the event of unemployment is regulated by REGULATION (EC) No. 883/2004 of 29 April 2004 on the coordination of social security systems.
Definitions
You are only a cross-border worker or "frontier worker", as defined in Article 1(f) of Regulation 883/2004, if you travel back to your EU home country as a general rule at least once a week. If you do not return to your EU home country at least once a week, you are what is called a “worker other than a cross-border worker”.
Which country to be insured in
Both frontier workers and workers other than frontier workers must be covered by the legislation, including unemployment insurance in the country where they work, cf. Article 11(3)(a) of the basic regulation.
Do not terminate your payment to unemployment insurance in your EU home before you are sure that you are covered by unemployment insurance in the neighbouring country (the country of work).
On the other hand it is also important that you are not covered by unemployment insurance in two countries at the same time. If thats the case it can result in that you may loose your right to unemployment benefits.
In the most EU countries, unemployment insurance is compulsary, and you will automatically be covered by unemployment insurance when you work there. However in other countries (like Denmark and Sweden) unemployment insurance is voluntary and you must therefore your self ensure that you become member of an unemployment insurance fund.
You can often transfer seniority from your EU home country's unemployment insurance to the unemployment insurance in your EU/EEA country of work, and back again when you stop working in the other EU country. Read more about the aggregation rule.
Benefits in the event of unemployment
The applicable law during unemployment is determined partly by whether you are a frontier worker or a worker other than a frontier worker, and partly by whether the person is fully, partially or temporarily unemployed.
If you become temporarily or partially unemployed in the country of work, you must apply for supplementary unemployment benefits (if possible) in the country of work, regardless of whether you are a frontier worker or a "worker other than a frontier worker". At the same time, you must be available to the employment services in the country of work, cf. Article 65(1) of the Regulation.
If you become fully unemployed as a frontier worker, you will be transferred to your home EU country's insurance system again, which means that you must register with your home EU country's unemployment insurance and deregister from the insurance in the country of work. You will receive unemployment benefits from your home EU country's unemployment insurance and must be available for the labour market in your home EU country.
You can often have your accrued rights transferred from the country of work to your home EU country's insurance system.
A "worker other than a frontier worker" who becomes completely unemployed can choose whether he or she wants to remain in the country of work and make himself or herself available, and receive unemployment benefits from there (requires documentation that one will not return to one's country of residence, see this decision), or return to one's country of residence and be covered by the rules and receive unemployment benefits from there.
Partially/periodically or completely unemployed?
When assessing whether a person is partially/periodically or completely unemployed, it is considered whether the person is still covered by a contract with the employer. A person is completely unemployed if the person has lost their connection to the company.
Forthcoming revision of the rule for cross-border workers
Cross-border homeworking in EU
If your work is divided between remote work at home and on-site work in the State where the statutory seat of the employer is established, you may be covered by the "Framework agreement on cross-border telework".
- Unemployment insurance in Europe →
- Social security coordination →
Cross-border commuters
You might also be interested in:
⇒Unemployment Insurance Schemes in EU
⇒Unemployment Insurance in the Nordic countries
Key points of EU Unemployment Insurance coordination
- Transferring periods of work and insurance between EEA countries As an EU citizen you can transfer acquired rights from Unemployment Insurance when moving between EU/EEA contries. In this way it may be easier to become entitled to unemployment benefit in the country you move to.
In the vast majority of the Member states the aggregation rule become fully applicable as soon as you starts to work in the country. However in Denmark, Belgium and Finland you must work some period there before you can use the aggregation rule.
You need a PD U1 document in the country you leave or if the involved countries use electronically exhange (EESSI) there will be issued a SED U002. The countries who issues the highest number of PD U1 documents are Germany, Austria, Switzerland and the Netherlands. The countries who receives most PD U1 documents are Lithuania and Italy. - Transferring unemployment benefits Under certain conditions you can go to another EU country to look for work and continue to receive your unemployment benefits from the country where you became unemployed. The period you can export your unemployment benefits varies from 3 to 6 months in the different Member states.
You have to apply for a PD U2 document in the country you leave, or if you haven't done that the institution in the receiving country must request a SED U008 from the competent institution in your last country.
The countries who issues the highest number of PD U2 documents are Germany, Switzerland, the Netherlands and Denmark. Poland is the country who receives by far most PD U2 documents. - Unemployment benefits coverage According to OECD the net replacement of income after 2 months of unemployment, for a single person without children whose previous in-work earnings were 67% of the average wage varies from 33 percent (Ireland) to 91 percent (Belgium). Read more here..
- Having residence in another EU country than where you work? According to EU social security coordination rules you must only be insured against unemployment in one country at a time. As a generel rule this country is where you work.
In Member states who have compulsory insurance, you will automatically be covered when you start working there.
However you may be insured by your country of residence if you are posted to a EU/EEA country or work in two or more EU/EEA countries at a time. In these situations you can not your self decide where to have unemployment Insurance, but you (or your employer) must apply for a PD A1 document which states in which country you are covered by social security, including Unemployment Insurance. Special rule also apply for cross-border workers ("frontier workers"). - Third-country Nationals working in EU/EEANON-EEA citizens are covered by Unemployment Insurance in the EU countries who have compulsory Unemployment Insurance. In countries with voluntary Unemployment Insurance (Denmark, Sweden and Finland) third-country nationals can become member of an Unemployment Insurance Fund.
In the most countries Third-country nationals can also use the EU Coordination rules when moving within EU/EEA (however not in Denmark, Iceland, Liechtenstein, Norway and Switzerland).
Third-country nationals in short-tem working relations often faces problems with actually get Unemployment benefits, even though they have contributed to the system. This is due to the fact that one normally need a residence permit which allow one to take any job, and also because of a qualifying period in most countries between 6-12 months.