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Maritime Law

Social Security in Malta

By April 26, 2017November 10th, 2023No Comments

Considering the publication on 11/03/2017 of French Decree 2017-307 of 09/03/2017, here are a few points for which Malta can be a solution to the issues raised by that Decree. 

In short, the French Decree imposes the affiliation to the French social security system, ONLY for French resident (not nationals) crewmembers working on yachts not covered by EU legislation or an international social security agreement.

The Maltese flag can help, and be a solution, if EU rules are applied properly: 

1-     Under an EU flag, which includes Malta, citizens of the EU/EEA/Switzerland (resident or not) and residents of the EU/EEA/Switzerland (citizens or not) must be insured according to the law of the EU flag State, and in that State, under Regulation EC/883/2004 as amended; 

In Malta, non-resident EU/EEA/Switzerland citizens may opt for the social security system of their country of residence; 

The only exception for EU/EEA/Switzerland residents, lies in the sole case where employer and employee reside in the same Member State and where they affiliate in that State for the social security cover;

The equivalent of a social security card in Malta is the letter issued by the Maltese authorities;

In the past, to register under its social security system, Malta required that a seafarer working on a Maltese flag ship also resided in Malta; this was not in line with article 11 4) of Regulation EC/883/2004 as amended and is therefore not required anymore;

As far as I am concerned, as long as the Regulation EC/883/2004 is actually and properly applied, the aforementioned French Decree does not bear any direct effect on ships flying an EU/EEA/Switzerland flag; this is provided that crew members working on such ships are actually registered with and covered by the State’s social security system of that flag;

In Malta, we can offer brokers/owners to proceed with regularising and registering seafarers working under the Maltese flag in order to bring themselves back in line with the law (especially in order to avoid the application to them of the French Decree because of the lack of actual affiliation of the crew), as well as the monthly social security returns;

2-     Crew members who are neither residents nor citizens of the EU/EEA/Switzerland, hence citizens residing in a third country, working under the Maltese flag, must be insured according to the law of their country of residence;

 3-     Persons insured in Malta may benefit from a European Health Insurance Card (EHIC) and from an S1 form if they reside in a Member State other than Malta (on presentation of the salary slips showing the contributions);

They can also obtain the U1 form to claim unemployment benefits in their country of residence (request may be made online); 

4-     The process is rather simple; the employer must apply for a “PE number” and an income tax number (under an ‘inactive’ status if a foreign company), whether based in Malta or not, in order to carry out the monthly declaration (returns); a registration application must be made for each employee in order to obtain a social security number;

5-     Contributions are calculated based on a percentage of the weekly salary up to a certain threshold (€438.54); if the weekly salary is over that threshold, a fixed sum is upheld;

Taking into account the level of salaries earned by the crewmembers of a yacht, which are over the threshold, contributions are capped at €43.85 each for the employer and the employee, resulting in a total weekly contribution of €87.70 to which is added €1.32 for maternity fund;

See appendix table. 

6-     Regarding the pension aspect, each state pays a rate of benefit which reflects the length of the claimant’s insurance in their scheme; this applies anywhere in the EU, EEA, and Switzerland; a person who has worked for more than one year in two or more of the above-mentioned states will be paid a pension proportional to the periods in these states; so, if for instance a person worked 20 years in Malta, 15 years in Italy and 5 years in the United Kingdom (total 40 years), this person should get a pension of not less than 20/40 years of the theoretical amount from Malta, 15/40 from Italy and 5/40 from the U.K; all these states will work out the full theoretical rate of pension as if the person worked the whole 40 years there;

It is the portability of rights;

7-     Returns and payments are not optional, they are mandatory;

In addition, we can assist in applying for Maltese residency for crew members in order for them to be registered with the Maltese social security system, whatever the EU/EEA/Swiss flag, when the employer (the entity paying the salaries) is also registered in Malta (we can provide services for the registration in Malta of an “employer” of seafarers).

We can offer the aforementioned services in order to, inter alia: 

A-    allow operators of Maltese flag ships to get back in line with EU and Maltese law;

B-    avoid the side effects of the French Decree.

Regarding our fees, please do not hesitate to contact us.

For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.