4 December 2021
For a superyacht owner creating a high-performing team onboard requires planning and aligning, financially and emotionally, with the energy they have invested in becoming a yacht owner. With the boom in ownership and yachts in build planning a yachts remuneration and retention strategy is likely to result in a disappointing experience for the owner and his guests.
With this in mind, owners should proceed with caution if the crew employment businesses, yacht managers, or recruiter with whom they are engaged is focused on minimising employment costs such as social security.
There are various private schemes offered to yachts which along with the insurance policies claim to provide private alternatives to a State Social Security Scheme. None of these private solutions are, to my knowledge, approved by country bodies, such as ENIM in France.
There are significant legal consequences, both civil and criminal for yacht owners not complying with social security obligations. France has been active in ensuring the Seafarers resident in France are afforded protection (whether the yacht is pleasure or commercial). I was surprised during the recent Cannes Yachting Festival to hear from lawyers that there are still yacht owners regularly being prosecuted for hidden employment despite the legislation being in place for 5 years.
Within the EU, Seafarers, like other EU Nationals are entitled to be provided with social protection.
The underlying principle to insure seafarers (who are EU nationals) working on board vessels flying the Flag of an EU country, by virtue of Article 11.4 of EU Regulation 883/2004, they shall be subject to be insured in the Flag State. Registering your Yacht in Malta brings many benefits including the opportunity to register your crew in a EU member state scheme giving you piece of mind as a yacht owner.
The only exception for the seafarers to be insured in the Member State is where the Employer has the place of business/registered office is if the seafarer has his residency in the same Member State. In this case, the seafarer shall be subject to be insured in the Member State where the employer’s registered office is situated.
Article 11.4 of Reg. 883/2004, the undertaking paying the remuneration is deemed as the Employer. If you would like to learn more about our Crew Employment Services you can arrange a call.
Advantages of Malta Flag for Seafarers
Seafarers paying social security contributions under the Maltese scheme are covered for free state healthcare and benefits in cash. With regards to healthcare coverage, the insured person is issued with the Entitlement Health Insurance Card (EHIC). Information about benefits covered is available on the Malta Social Security Website
In every member state where one has been insured, the insurance record is preserved until one reaches pensionable age. In other words, the contributions which have been paid in one Member State are neither transferred to another member state nor paid out to the individual if he/she is no longer insured in that member state.
Every member state where one has been insured will pay an old-age pension when one reaches the pensionable age, provided that one has contributed in that country for at least one year. This pension will be calculated according to his/her insurance record in each member state. The amount received from each one of the member states will depend on the length of the coverage in each state.
For example, if one has worked in three member states, he/she will get three separate old-age pensions once reached the pensionable age of each country. When applying for a pension EU rules require each EU country to take into account the insurance history in other countries if this is necessary to meet the minimum number of years required to get a pension. Let’s say, if 15 years are required in one country, but he/she only has 10, the authorities will add the years worked in the other countries to meet the 15-year requirement.
Each country in which one meets entitlement conditions will pay a separate old-age pension proportionate to the years worked there. Example, if one has 21 years of contributions in France, 14 years in Germany, and 6 years in Malta – making a total of 41 years – one will receive three separate pensions based on the length of the insurance history in each country.
Malta can offer Seafarers, resident in Europe and possibly not able to contribute in other EU member states the opportunity to contribute into a EU member state scheme.
For further information regarding EU co-ordination rules, you may visit the following link: http://ec.europa.eu/social-security-coordination
In addition, Malta offers attractive residency for seafarers who meet Qualifying Criteria Employment in Maritime Activities. For more information on Yacht Registration, Crew Employment or Seafarer Residency you can Book a call with us.