The case concerned an Austrian national who worked as a self-employed lawyer in Liechtenstein while holding a minor town-council mandate in Austria, her country of residence. That mandate produced less than 0.5% of her overall income and was classified as a civil servant type role. She later began drawing an Austrian old-age pension while continuing her self-employment in Liechtenstein. Liechtenstein required her to pay compulsory social security contributions, and she challenged that decision by pointing to the Austrian mandate and her pension.
The EFTA Court reached two conclusions. First, “marginal activity” is an autonomous concept under EU and EEA law, and its purpose is to filter out minor, economically insignificant activities so that they do not determine which country’s system applies. An activity producing less than 0.5% of a person’s overall income creates a strong presumption that it is marginal; unless that presumption is rebutted, the activity must be disregarded. A civil servant type role is not exempt from this test: the correct order of analysis is to establish whether an activity is marginal first, and only then, if it is not marginal, to classify it and apply the corresponding rule. Second, drawing an old-age pension in one state is not a working activity and does not prevent another state from applying compulsory insurance where the person continues to work there.
What this means for employers
The practical risk sits in the A1 determination. Where a small activity is used as a blunt filter to exclude a country from the assessment altogether, the applicable social security legislation can be decided incorrectly, which exposes the employer and the employee to contributions in the wrong state or to dual liability. The ruling confirms that the “marginal activity” concept is not a device for deciding which states appear on an A1 application; it exists to ensure that only genuine, non-trivial activities count when deciding which country’s system applies, and to stop a negligible role from shifting coverage to another country.
The EFTA Court interprets the same instruments that Denmark applies, EU Regulation 883/2004 and its implementing Regulation 987/2009, and its reasoning is consistent with the case law of the Court of Justice of the European Union. For an employer whose workforce moves between Denmark and another EEA state, the opinion is therefore instructive for how a Danish A1 determination that turns on marginal activity should be reasoned, even though the EFTA Court’s opinions are addressed to the EEA and EFTA states. The five percent indicator often cited from the Administrative Commission’s Practical Guide remains an indicator, not a mechanical rule; the assessment is holistic, weighing working time, income share, and the real economic and professional significance of each activity.
What to do now
- Review the A1 certificates held by staff who work in two or more EEA states, and identify any determination that relied on a "marginal activity" argument.
- Where a minor activity has been used to exclude a country from the assessment, be prepared to object and to ask for a holistic, evidence-based review.
- Keep documentation of the working time, income share, and genuine significance of each activity, so the classification can be defended in an audit or a dispute.
- Do not assume that a civil servant type role, or the receipt of an old-age pension, settles which country's system applies.
How we can help
We assess multi-state working patterns, prepare and support A1 applications, and coordinate with the competent institutions so that the applicable social security legislation is determined correctly from the start. Where a determination is contested, we help assemble the evidence on working time, income, and the real significance of each activity that the assessment now depends on. If your workforce spans Denmark and another EEA state, we can confirm whether your current A1 positions hold up against this ruling.
Unsure whether your A1 certificates reflect this ruling?
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