Do I have to pay social security in France?

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Q: Mark, Bosun, 27:

“I heard this week that crew based in France are going to have to start paying French social security. Is this true? I’m Australian, and my yacht is based in Antibes for a lot of the year. But Brits on my boat are saying they won’t have to pay it because they’re part of the EU or something? But what happens with Brexit, aren’t they leaving the EU? And is it just for charter yachts or will this apply to all yachts? Nobody seems to have a clue what is going on!”

A: The Crew Coach:

Yes, this one’s definitely the story of the week, and I see from all the talk in the forums on Facebook etc that there’s still a lot of confusion as to what this new development means for yacht crew. Thanks for asking the question because I bet there are a tonne of other people out there scratching their heads about it! I can give you a general run-down here, but the PYA website and Facebook pages are definitely the ones to watch for updates, as they’re collaborating with a team from Lesia Employment Services and a maritime law firm for information.

The Lesia team have actually put together a brilliant summary of the situation as it stands now, as well as two nifty little flowcharts- one for employers (ie yachts), and one for crew, which will help you figure out if you need to make social security payments to France.

I strongly suggest you start by reading those to figure out your obligations – trust me they’ve made it very simple and you don’t have to wade through pages and pages of boring text!

The general gist goes like this…

The French government has brought into law that all seafarers resident in France must start paying into French social security, unless they can show that they are already paying social security in either:

An EU member state or EEA state, or
A country with a bilateral social security agreement with France. (Sorry, in your case Australia doesn’t have one in place.)
The trick of course, is defining what ‘resident in France’ means. This is a minefield, as in French law being ‘resident’ is the place that you have the closest links to- whether professional, family, property etc. (This Superyacht News piece also explains that if you have France listed as your place of repatriation on your SEA agreement then you are likely to be considered a French resident.)

In practice though, a general formula for figuring out if you are ‘resident’ in France as yacht crew is if your yacht spends 183 days of the year or more in France.

And no, it’s not just for charter yachts- it applies to all non-French flagged vessels based in France.

How will it work?

Employers will have to make either monthly or quarterly payments into ENIM, the maritime social security in France. They can do so via a French agent if they wish.

The industry has until 01 July 2017 to conform to the new regulations. Failure to do so on the yacht’s part may result in the yacht being arrested.

What will you get back?

The French government will offer health and medical cover in exchange, as well as a full retirement pension when you have reached 25 years of service as a seafarer (after you turn 50). There are also pro-rata pensions available if you don’t make it to 25 years: after all, that’s a pretty good innings in yachting! Check out the details in the Lesia summary.

This may feel like little comfort for yacht crew who already have good health insurance policies as part of their contract on board, but may be of interest to those who would like a pension to retire with! The French medical system is one of the best in the world and you definitely do get your money’s worth from these benefits. One thing I am not sure of is whether or not you can claim unemployment benefit as a result of losing a yachting job once you are paying in to the French system, I suspect this is a whole new can of worms to be explored!

What does it mean for you and your crew?

If your yacht is based in Antibes year-round and you’re Australian (therefore not holding a reciprocal agreement with France), based on my understanding of this new regulation as it stands, you may well have to pay social security in France as of July. Please seek expert advice though as this is just my interpretation of the new legislation.

As for your British crew, they may well not have to pay, but only if they’re already paying into national insurance back in the UK, which at the moment is still an EU member state. However, as you point out, the UK isn’t going to be part of the EU for long. No-one knows at this stage what kind of arrangement the UK will have with France and the EU post-Brexit, so I’m not even going to hazard a guess on this now.

There is still a lot of dust to settle on this social security matter yet and I’m far from an expert on this. I hope this helps, but definitely seek expert advice from a yachting related accountant, check out the links above from Lesia, and follow the PYA for updates.

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