What has been agreed in the latest round of Brexit negotiations on freedom of movement, healthcare, pensions and other expatriate rights?
Updated 24 October 2017
Following the latest round of negotiations, the UK and the EU have made some headway in some key areas affecting expatriates.
Most significantly, the Spanish foreign minister has reassured UK nationals living in Spain that they are welcome to stay, whatever happens. “If there is no deal”, Alfonso Dastis stated, “we will make sure that the lives of ordinary people who are in Spain – the UK people – are not disrupted”.
See more about Spain’s pledge to British expatriates
While other member states have not yet offered such a public commitment, this is encouraging for expatriates elsewhere, as countries enjoying a similarly close relationship with the UK may follow Spain’s lead.
So what has actually been agreed and what issues affecting citizens’ rights are still under negotiation?
- Onward freedom of movement
Britain has proposed more flexibility for expatriates’ freedom of movement by offering EU citizens in the UK “guaranteed rights of return”. This means those lawfully resident in Britain before Brexit would be able to leave and freely return at a later date. Previous proposals only allowed a two-year window for this right.
The ball is now in the EU27’s court to agree reciprocal rights for the movement of Britons within the bloc. As things stand, a UK national resident in Portugal, for example, would be unable to relocate to Spain from April 2019 without having to apply for visas and permits as a non-EU citizen.
Hopefully, an answer on whether the EU27 will mirror Britain’s offer will follow the conclusion of the next round of negotiations.
- Access to healthcare and pensions
Both sides have confirmed they will carry on reimbursing certain healthcare costs for citizens under the EHIC (European Health Insurance Card) and S1 schemes. They have also agreed to continue yearly inflation increases in state pension payments for nationals living abroad.
One area still to be resolved is the potential ‘cliff-edge’ for British personal pension and insurance payments. When current EU ‘passporting’ rights for UK financial services companies expire on Brexit day, these providers cannot legally make payments to Britons abroad. However, with both sides having a mutual financial interest in resolving this issue, it is likely to be addressed early in the next phase of negotiations.
- Legal protection for citizens
A former ‘red line’ area for Britain has been how much power the European courts should have over UK law after Brexit. The EU have maintained that EU citizens must continue to be protected by the European Court of Justice (ECJ) while living in the UK post-Brexit. The Prime Minister initially insisted that the UK would “take back control of our laws” post-Brexit and have exclusive enforcement rights within its borders.
However, she has now offered more flexibility by signalling a future role for the ECJ in settling disputes on British soil. Crucially, she has also offered to incorporate legal protections for EU citizens into UK law to ensure Parliament cannot restrict these rights.
Long an issue of contention between the two parties, the Prime Minister has now confirmed that Britain will pay its financial dues until 2020. She also reassured the EU27 that they will not have to pay more or receive less as a result of the UK’s exit.
However, the actual figure required to meet these promises is unclear. So far, she has only agreed to pay a divorce bill of around €20 billion up to 2020, falling short of the estimated €50-€100 billion payment expected by the EU.
- Delaying full Brexit until 2021
In her speech in Florence on 22 September, the Prime Minister requested a two-year transition period for Britain’s exit from the union. She pledged that Britain would continue to follow EU rules until 2021 – including freedom of movement and paying into EU coffers – in return for uninterrupted access to the single market.
It is expected that the timeline for transition will only be considered once the EU27 officially agree that “sufficient progress” has been made to move negotiations beyond specifically divorce-related issues.
What happens next?
Following a two-day summit in late October, the EU27 agreed to start internal discussions about moving onto the next phase of negotiation topics, including trade arrangements and the transition period. However, the UK is expected to provide a clearer financial commitment before these talks can officially begin in December.
Britain has now made concessions in three key areas – accepting free movement of EU citizens, paying its share of EU bills and maintaining the legal authority of the ECJ – which is widely seen as a positive step towards securing mutual agreement. Although there is still a long way to go, Britons living in the EU can find reassurances in the latest developments, especially the certainty around healthcare and state pension payments.
Amidst so much future uncertainty, however, it is important to understand how you could be affected and be as prepared as you can possibly be. A locally-based financial adviser who has a good understanding of the interaction between the tax systems in both the UK and your country of residence can help you keep up-to-date with Brexit developments and find the best solutions tailored for you as an expatriate.
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