Social Security Convention between UK and Chile

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A decision made on 15th April 2011:

Decision Reference: MD-C-2011-0041
Decision Summary Title:	UK – Chile Social Security Convention 2003.4.5		Date of Decision Summary:	30 March 2011
Decision Summary Author:	International Relations		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title:	Convention on Social Security between the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Chile		Date of Written Report:	30 March 2011
Written Report Author:	HMRC		Written Report : Public or Exempt?	Public
Subject: UK – Chile Social Security Convention
Decision(s): The Chief Minister decided, in consultation with the Minister for Social Security, that the proposed Convention on Social Security between the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Chile should apply to Jersey, subject to ratification by the States of Jersey, and that the Convention should therefore be signed in respect of Jersey by the United Kingdom government.
Reason(s) for Decision: Under Article 18(3)(b) of the States of Jersey Law 2005, the Chief Minister is responsible for conducting Jersey’s external relations. Extension of international conventions, where appropriate, is consistent with the agreed strategic objective of the States (Strategic Plan 2009-2014) to ‘Strengthen international relationships, supported by legislation, regulation and international agreements, in order to enhance recognition as a responsible jurisdiction committed to international standards.” The Government of the United Kingdom wishes to conclude a reciprocal social security convention with the Republic of Chile and has consulted Jersey as to whether they wish to be included in this agreement. The Minister for Social Security has indicated that he wishes Jersey to be included in the Convention. The Law Officers have indicated they see no problems with entering into the agreement. The United Kingdom Government will sign the convention in early April 2011, to include Jersey within the terms of the convention if that is the wish of Jersey’s government. The convention may come into force in respect of Jersey only when it is subsequently ratified by the States of Jersey. A further MD will be prepared in due course, following signature of the Convention, to request that a report and proposition may be lodged au Greffe by the Chief Minister to seek ratification of the Convention by an Act of the States.
Resource Implications: There are no revenue or manpower implications arising from this decision. It is considered any consequences with regard to the Social Security funds are minimal.
Action required: The Chief Minister is requested to approve this decision. Chief Minister’s Department to inform the States Greffe of the decision. Chief Minister’s Department to prepare a letter to the Ministry of Justice for transmission through the official channel, confirming the government of Jersey is content for the convention to be signed in respect of Jersey.
Signature:		Position: Senator T.A. Le Sueur, Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Social Security Convention between UK and Chile

CONVENTION ON SOCIAL SECURITY

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF CHILE

AND THE GOVERNMENT OF THE UNITED KINGDOM OF

GREAT BRITAIN AND NORTHERN IRELAND

The Government of the Republic of Chile and the Government of the United Kingdom of Great Britain and Northern Ireland;

Determined to cooperate in the scope of social welfare and, in particular, as regards obligations on social security contributions;

Desirous of promoting the welfare of people moving between their respective territories or working there;

Desirous of ensuring that individuals from both countries enjoy equal rights in respect of those matters comprised in this Convention in accordance with their respective social security laws;

Have agreed as follows:

PART I

GENERAL PROVISIONS

ARTICLE 1

DEFINITIONS

(1) For the purpose of this Convention the following definitions shall apply, except where the context otherwise requires:

(a) “Country” or “territory” means:

(i) in relation to the Republic of Chile, the scope of application of the Political Constitution of the Republic of Chile, and

(ii) in relation to the United Kingdom, Great Britain and Northern Ireland and, where so required by the context of this Convention, the Isle of Man, Jersey and Guernsey also. Likewise, where so required by the context, any reference to "territory", applicable to the United Kingdom, shall include the Isle of Man, Jersey and Guernsey, and

"Guernsey" means the Islands of Guernsey, Alderney, Herm and Jethou, and

"Jersey" means the Island of Jersey;

(b) "Competent Authority" means:

(i) in relation to the Republic of Chile, the Minister of Labor and Social Security, and

(ii) in relation to the territory of the United Kingdom, the Department for Work and Pensions and the Commissioners for Her Majesty’s Revenue and Customs or their authorised representative for Great Britain, the Department of Health, Social Services and Public Safety for Northern Ireland, the Departments of the Treasury and Social Care of the Isle of Man, the Social Security Department of the States of Jersey or the Social Security Department of the States of Guernsey as the case may require;

(i) in relation to the Republic of Chile, any person who is at the service of

an employer under a subordination and dependence relationship, as well as a person considered as such by the applicable regulations, and

(ii) in relation to the United Kingdom, a person who, under the applicable legislation, comes within the definition of an employed earner or of an employed person or is treated as such,

and the words “worker is employed” shall be construed accordingly;

(d) "self-employed worker" means:

(i) in relation to the Republic of Chile, any person who performs a gainful activity on his

own account, and

(ii) in relation to the United Kingdom, a person who, in the applicable legislation, comes within the definition of a self-employed earner or of a self-employed person or is treated as such,

and the words "worker is self-employed" shall be construed accordingly;

(e) "employment" means employment as an employed worker and the words "employ", "employed" or "employer" shall be construed accordingly;

(f) "gainfully employed" means employed, or self-employed;

(g) "insured" means:

(i) in relation to the Republic of Chile, that the person is affiliated to or is a

contributor to the applicable social security system, and

(ii) in relation to the United Kingdom, that contributions have been paid by, or are payable by, or in respect of, or have been credited in respect of, the person concerned.

(h) "legislation" means:

(i) in relation to the Republic of Chile, the laws, regulations and provisions on contributions and benefits of the Social Security systems indicated under Article 2 of this Convention, and

(ii) in relation to the United Kingdom, the laws, regulations and provisions on contributions and benefits of the Social Security systems indicated under Article 2 of this Convention.

(i) "Ordinarily Resident",

(i) in relation to the Republic of Chile, means domiciled in the terms defined by the internal legislation, and

(ii) in relation to the United Kingdom, carries its plain English meaning.

(j) “liability for contributions” means:

(i) in relation to the Republic of Chile, the obligation to pay contributions according to the Chilean legislation, and

(ii) in relation to the United Kingdom, the obligation to pay contributions according to United Kingdom legislation.

(2) Other words and expressions which are used in this Convention have the meanings respectively assigned to them in the legislation concerned.

(3) Any reference in this Convention to an "Article" means an Article of this Convention, and any reference to a "paragraph" is a reference to a paragraph of the Article in which the reference is made, unless it is stated to the contrary.

ARTICLE 2

SCOPE OF LEGISLATION

(1) This Convention shall apply,

(a) in relation to the territory of the Republic of Chile, to:

(i) The old age, disability and survivorship pension system based on individual capitalisation, and

(ii) The old age, disability and survivorship pension schemes administered by the Social Security Institute.

(b) in relation to the territory of the United Kingdom, to:

(i) the Social Security Administration Act 1992, the Social Security Contributions and Benefits Act 1992, the Social Security (Consequential Provisions) Act 1992;

(ii) the Social Security Administration (Northern Ireland) Act 1992, the Social Security Contributions and Benefits (Northern Ireland) Act 1992, the Social Security (Consequential Provisions) (Northern Ireland) Act 1992;

(iii) the Social Security Administration Act 1992, the Social Security Contributions and Benefits Act 1992 and the Social Security (Consequential Provisions) Act 1992 (Acts of Parliament) as those Acts apply to the Isle of Man by virtue of Orders made, or having effect as if made, under the Social Security Act 2000 (an Act of Tynwald);

(iv) the Social Insurance (Guernsey) Law, 1978;

(v) the Social Security (Jersey) Law, 1974;

and the legislation which was repealed or consolidated by those Acts, Laws or Orders or repealed by legislation consolidated by them.

(2) Subject to paragraph (3), this Convention shall apply also to any legislation which supersedes, replaces, amends, supplements or consolidates the legislation specified in paragraph (1).

(3) This Convention shall not affect rights and obligations arising under legislation on social security in accordance with the EC Treaty or the EEA Agreement or apply to any convention on social security which either Party has concluded with a third party or to any laws or regulations which amend the legislation specified in paragraph (1) for the purpose of giving effect to such a convention, but shall not prevent either Party taking into account under this Convention the provisions of any other convention which that Party has concluded with a third party.

Article 3

Personal Scope of Application

This Convention shall apply to those individuals who are or were subject to the laws of either Party and to those individuals who derive their rights therefrom.

ARTICLE 4

EQUAL TREATMENT

Any person who is or was subject to the legislation of either Party shall, while in the territory of the other Party, have the same rights and obligations (by virtue of the legislation of the other Party), as a national of that Party, subject to the special provisions of this Convention.

PART II

PROVISIONS WHICH DETERMINE THE LEGISLATION APPLICABLE

CONCERNING CONTRIBUTION LIABILITY

ARTICLE 5

GENERAL PROVISIONS

(1) Subject to paragraphs (2) to (9) of this Article and to Articles 6 to 8, where an employed worker is employed in the territory of either Party, the liability for his or her contributions shall be determined only in accordance with the legislation of the party in whose territory he or she is working. Where a worker is only subject to the legislation of the United Kingdom in accordance with this paragraph, such legislation shall apply as if he or she were ordinarily resident in the United Kingdom.

(2) Where an employed worker is employed in the territory of both Parties for the same period, the liability for his or her contributions shall be determined only under the legislation of the Party of which territory he or she is ordinarily resident.

(3) Where a self-employed worker is ordinarily resident in the territory of one Party and the worker is self-employed in the territory of the other Party, or in the territory of both Parties, liability for contributions for him or her shall be determined only under the legislation of the Party in whose territory he or she ordinarily resides and that legislation shall apply to him or her as if he or she were self-employed in the territory of that Party.

(4) Where a person is an employed worker in the territory of one Party and a self-employed worker in the territory of the other Party for the same period, liability for contributions for him or her shall be determined only under the legislation of the Party in whose territory he or she ordinarily resides.

(5) No provision of this Article shall affect a person's liability to pay a Class 4 contribution under the legislation of Great Britain, Northern Ireland or the Isle of Man.

(6) Where, in accordance with Article 6, an employed worker works in the territory of the United Kingdom, being bound to pay contributions in accordance with the Chilean legislation, the legislation of the United Kingdom shall not apply nor will he or she be responsible or entitled to pay contributions according to the legislation of the United Kingdom.

(7) Where, in accordance with Article 6, an employed worker works in the Chilean territory, being bound to pay contributions in accordance with the legislation of the United Kingdom, the legislation of the Republic of Chile shall not apply nor will he or she be responsible or entitled to pay contributions according to the legislation of the Republic of Chile.

(8) Where a person is employed in the United Kingdom and the legislation of the Republic of Chile ceases to apply to him or her under Article 6, the legislation of the United Kingdom shall apply to him or her as if he or she were ordinarily resident in the United Kingdom.

(9) Where a person is not gainfully employed, any liability for contributions shall be determined under the legislation of Guernsey if he or she is ordinarily resident in Guernsey, or under the legislation of Jersey if he or she is ordinarily resident in Jersey.

ARTICLE 6

DETACHED WORKERS

Subject to Articles 7 and 8, where an employed worker who is insured under the legislation of one Party, and employed by an employer with a place of business in the territory of that Party, is sent by that employer, either from the territory of that Party, or from a third country not party to this Convention, to work in the territory of the other Party, the legislation of the former Party concerning liability for contributions shall continue to apply to him or her as if he or she were employed in the territory of that Party, and the legislation of the latter Party shall not apply to him or her, provided that the employment in the territory of the other Party is not expected to last for more than 5 years.

ARTICLE 7

MARINERS AND AIRCRAFT CREW

(1) The crew of a vessel and other workers employed on board a vessel, who perform work in the territories of both Parties and who would otherwise be covered under the laws of both Parties shall be subject to the legislation of the Party whose flag the vessel flies.

(2) Aircraft crew who perform work in the territories of both Parties and who would otherwise be covered under the laws of both Parties shall, with respect to that work, be subject to the laws of only the Party in the territory of which the employer has its main office. However, if such employees are ordinarily resident of the other Party, they shall be subject to the laws of only that Party.

ARTICLE 8

DIPLOMATS, GOVERNMENT SERVANTS AND CONSULAR EMPLOYEES

(1) This Convention shall not apply to persons who are exempt from the social security legislation of the Party in whose territory they render services by virtue of the Vienna Convention on Diplomatic Relations of April 18, 1961, or the Vienna Convention on Consular Relations of April 24, 1963.

(2) Subject to paragraph (1), where any person who is employed in the Government Service of one Party, or treated as such, is sent to work in the territory of the other Party, the legislation of the former Party concerning liability for contributions shall apply to him or her as if he or she were employed in its territory.

(3) Subject to paragraphs (1) and (2), where a person is employed in a diplomatic mission or consular post of one Party in the territory of the other Party, or in the private service of an official of such a mission or post, the legislation of the latter Party concerning liability for contributions shall apply to him or her as if he or she were employed in its territory, unless within three months of the entry into force of this Convention, or within three months of the beginning of the employment in the territory of the latter Party, whichever is later, he or she chooses to be insured under the legislation of the former Party, provided that he or she has been so insured at any time before the commencement of the employment at that mission or post. Where, under this paragraph, a person has the right to choose to be insured under the legislation of the former Party but does not choose to do so, he or she shall not be liable, nor entitled, to pay contributions under the legislation of the former Party.

ARTICLE 9

MODIFICATION PROVISIONS

Exceptionally, the Competent Authorities or the Liaison Bodies of the Parties may agree to modify the application of Articles 5 to 8 in respect of particular persons or categories of persons.

PART III

MISCELLANEOUS PROVISIONS

ARTICLE 10

ARRANGEMENTS FOR ADMINISTRATION AND CO-OPERATION

(1) The Competent Authorities of the two Parties shall:

(a) establish the Administrative Arrangements necessary for the application of this Convention;

(b) establish Liaison Bodies for the purpose of facilitating the implementation of this Convention and determine their competence;

(c) communicate to each other, as soon as possible, all information about the measures taken by them for the application of this Convention or about changes to their national legislation in so far as these changes affect the application of this Convention;

(d) assist one another on any matter relating to the application of this Convention as if the matter were one affecting the application of their own legislation. This assistance shall be free of charge.

(2) Where the legislation of one Party establishes that any certificate or other document submitted in accordance with the legislation of that Party is wholly or partly exempt from any kind of legal consular or administrative taxes and duties, such exemption shall be applicable to any certificate or other document submitted under the legislation of the other Party or in accordance with this Convention.

(3) All declarations, documents and certificates of any type that need to be submitted for the purpose of this Convention shall be free from diplomatic or consular legalisation formalities.

(4) No certificate, document or statement of any kind written in English or Spanish shall be rejected on the ground that it is written in a foreign language.

(5) Unless disclosure is required under the legislation of a Party, any information about an individual which is sent in accordance with, and for the purposes of, this Convention to that Party by the other Party is confidential and shall be used only for the purpose of implementing this Convention and the legislation to which this Convention applies.

ARTICLE 11

RESOLUTION OF DISPUTES

(1) Disagreements between the Parties regarding the interpretation or application of this Convention shall, as far as possible, be resolved through agreement of the Competent Authorities.

(2) If a disagreement cannot be resolved through negotiation, the Competent Authorities will endeavour to settle the issue through arbitration, mediation, or other mutually agreed procedure.

PART IV

TRANSITIONAL AND FINAL PROVISIONS

ARTICLE 12

TRANSITIONAL PROVISIONS

In applying Article 6 in the case of employed workers who were sent to the territory of a Party prior to the date of entry into force of this Convention, the period of employment referred to in that Article shall be considered to begin on that date.

ARTICLE 13

RATIFICATION AND ENTRY INTO FORCE

Each of the Parties shall notify the other in writing, through diplomatic channels, of the completion of the procedures required by its law for the bringing into force of this Convention. This Convention shall enter into force on the first day of the third calendar month following the date of the later of these notifications.

ARTICLE 14

LIFE OF THE CONVENTION

This Convention shall remain in force for an indefinite period. The Republic of Chile or the United Kingdom of Great Britain and Northern Ireland may denounce it at any time by giving six months' notice in writing through diplomatic channels to the other Party.

ARTICLE 15

RIGHTS ON TERMINATION OF THIS CONVENTION NOT

REPLACED BY ANOTHER

In the event of termination of this Convention in accordance with article 14 and unless a new

Convention containing provisions regulating the matter is made, any right to benefit acquired by a person in accordance with this Convention shall be maintained and negotiations shall take place between the Competent Authorities for the settlement of any rights then in course of acquisition by virtue of its provisions.

In witness whereof the undersigned, duly authorised by their respective Governments, have signed this Convention.

Done in duplicate at ......................... this ..................... day of .........................., in the English and Spanish languages, both texts being equally authentic.

For the Government of the For the Government of the

United Kingdom of Great Republic of Chile:

Britain and Northern Ireland: