Applying for an old-age pension as a cross-border worker

Last updated more than 5 years ago

Cross-border workers pay their contributions in the country where they work and thus enjoy the same rights as resident workers, with the exception of certain non-exportable benefits. In terms of social security, the legislation of the country of employment is applicable.

At the time of retirement, all contribution periods in a European Union Member State (with the exception of Bulgaria and Romania), the European Economic Area (EEA) (EU countries plus Iceland, Norway and Liechtenstein), or Switzerland, are taken into account and added together to determine entitlement to and the amount of the old-age pension.

Contributors who wish to retire must submit their application for a pension directly to the competent pension fund in their country of residence, which will forward it to the competent bodies in the other countries involved.

Who is concerned

The term 'cross-border worker' refers to a person, whether employed or freelance, working in one State (in the present case, Luxembourg) other than their country of residence (usually Belgium, France, Germany, etc.), to which they return every day in principle, or at least once a week.

Cross-border workers who are seconded by the company that normally employs them or provides services in the territory of the same Member State or another Member State shall retain cross-border worker status for a period not exceeding 4 months, even if during that period they cannot return every day or at least once a week to their place of residence.

Prerequisites

The pension awarded by a State is paid only if the applicant meets the conditions for the granting of the pension stated in the legislation of the country of residence, since pensionable age is governed by national regulations. The legal pension age varies from country to country. In the case of a so-called mixed career, where the contributor has contributed to old-age insurance schemes with different age limits, they will receive benefits from each country when they meet the age requirement stated in its legislation.

To qualify for part of the pension paid by a Luxembourg social security institution, Belgian, French and German residents must have worked for at least one year in Luxembourg. If the period is less than one year, the months of paying contributions in Luxembourg will be taken into account by the country of residence but will not result in payment from the Luxembourg fund.

How to proceed

Submitting the application

In principle, social security benefits are only granted upon formal application by the interested party. Cross-border workers are obliged to submit their application to the competent body in their country of residence and observe the legal requirements of that country. If necessary, that body will forward the forms to the competent bodies of the other countries concerned (contributors must specify, though, that they have also paid contributions in another country).

Example 

Mr X lived in Country A and worked in neighbouring Country B as a cross-border worker. He paid pension contributions in Country B. There are several possible scenarios:

  • If he lives in Country A at the time he wishes to apply for his old-age pension, he must send his application to the agency of Country A;
  • If he resides in Country B, he will apply to the agency of Country B where he paid his pension contributions;
  • If he lives in another country (that is, neither A nor B), he must submit his application to the pension authority of Country B, where he was last registered. Country B will forward his application to the other relevant bodies.

To avoid unnecessary delays, it is important to file the application for the old-age pension with the competent organisation well before the date of eligibility. In Belgium, for example, the application must be submitted one year before the eligibility date.

Exceptions

If, at the time of retirement, a Belgian, German or French resident is receiving sick pay from a Luxembourg fund, they may apply for a pension to the appropriate Luxembourg pension fund. If a cross-border worker also pays social security contributions in their country of residence, the Luxembourg pension fund will contact the relevant pension authority in the employee's country of residence to review the pension rights in that country.

Payment of a pension

There are three possible scenarios:

  • if the cross-border worker has contributed for less than one year in Luxembourg and for the rest of their career in France, Belgium or Germany, the pension fund of the country of residence shall pay their pension in full;
  • the cross-border worker has worked part of their career in Luxembourg and the other part in the country of residence and/or in another country of the EU or EEA. This is called a 'mixed' career; the worker receives a pension from each State, provided they have been a contributor in the country for at least one year (except for France, where a contribution period of one quarter is sufficient);
  • If a cross-border worker has spent their entire career in Luxembourg, the entire pension shall be paid by the Luxembourg fund, even if the worker is not resident in the country.

A non-resident pensioner receiving a Luxembourg pension will generally have to declare the pension in their country of residence.

Every Member State is required to take account of contribution periods in the other countries if such accumulation would increase the amount of the pension due. This is the principle of aggregation of insurance periods, which guarantees that periods of contribution or work completed in one Member State will be taken into account if necessary in order to qualify for benefits in another Member State. Work periods in the public sector are also taken into account. On the other hand, certain rules are still domestic, such as the pensionable age.

A contributor who has completed periods of social security contributions under the legislation of more than one Member State shall be entitled to a partial pension in each country, the amount and legal age of which are determined in accordance with the legislation applicable in the State concerned.

Calculation of old-age pension

In the case of a mixed career, the applicant receives a pension from each State in which they have paid contributions. The amount of each pension to which a cross-border worker is entitled is proportional to the number of years of contributions completed in the country concerned.

Each State where a cross-border worker has contributed shall carry out the following calculation:

  • domestic pension: the domestic pension is calculated on the basis of national legislation, only taking account of periods worked in the country for longer than the minimum period of affiliation;
  • theoretical amount: the competent institution calculates the theoretical amount of the old-age pension that would have been payable if the contributor had completed all insurance periods (including those completed abroad) under its legislation;
  • proportional pension: on the basis of the theoretical amount, it determines the actual amount in proportion to the insurance periods actually completed under its legislation.

The appropriate pension fund then pays the higher of the two pensions (usually the proportional pension).

The legal pension age varies from country to country. In the case of a mixed career, if the contributor has paid into old-age insurance schemes with different age limits, they will receive benefits from each country when the age requirement stated in its legislation has been met.

Example 

A cross-border worker resident in Belgium worked for 40 years, 30 years of which were in Luxembourg. They can then apply for a pension from age 57, which is the minimum legal age for premature retirement in Luxembourg. In this case, they receive only the Luxembourg part of the pension until they reach pensionable age in Belgium (minimum age of 60).
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