EEA nationals with pre-settled status may still face benefit restrictions

8 May 2019

How obtaining status under the EU Settlement Scheme affects benefit and housing entitlement

Although the final arrangements for the UK’s exit from the EU are still unclear, what is certain is that EEA nationals wishing to stay in the UK will need to apply for settled or pre-settled status under the EU Settlement Scheme, which opened fully on 30 March 2019. 

With regards to how obtaining status under the EU Settlement Scheme will impact on entitlement to benefits and other services, government information has generally referred to people as ‘having broadly the same entitlements as now’. However, establishing an EEA national's entitlement to benefits is not straightforward and there has been a lot of confusion with regards to how obtaining status under the EU Settlement Scheme affects this. 

The information below sets out some basic information about benefit and housing entitlement, and we also consider what this means for local authorities when an EEA national is ineligible for benefits and is at risk of homelessness. 

EU Settlement Scheme 

The UK has not yet left the EU. Although the exit date has been postponed to 31 October 2019, this could be brought forward if a deal is agreed with the EU. EEA nationals and their family members can continue to exercise EU free movement rights to enter and live in the UK until exit date and, if a deal is agreed, during a transition period which will end on 31 December 2020. 

The EU Settlement Scheme is already open and is operating in parallel to EU free movement and other residence rights that derive from EU treatiesThe type of status granted under the EU Settlement Scheme is very different to the residence rights that are acquired under EU law:

  • EEA nationals and their family members who have lived in the UK for five years will be able to apply for settled status. Successful applicants will be granted indefinite leave to remain
  • A person who has not lived in the UK for five years when they apply will be eligible for pre-settled status  and will be granted limited leave to remain for a period of five years. They may apply for settled status as soon as they have completed five years' residence - they do not need to wait until the end of their pre-settled status but must apply before their leave to remain expires
  • To obtain settled status, a person must demonstrate continuous residence in the UK during the qualifying period and does not need to have been exercising EU free movement rights, for example, as a worker.
  • The requirements to obtain settled and pre-settled status are set out in the Immigration Rules. Leave to remain or indefinite leave to remain obtained through the EU Settlement Scheme will be granted under the Immigration Act 1971. 
  • The ‘no recourse to public funds’ (NRPF) condition will not be applied, which means that a person with settled or pre-settled status will be able to claim benefits, homelessness assistance and a local authority allocation of housing when they meet the relevant eligibility requirements. 
  • An EEA national who is granted settled or pre-settled status will not have a physical status document and instead will be issued with their status digitally, which would need to be checked online when services are accessed. 
  • Non-EEA family members will be issued with a Biometric Residence Permit as well as the digital form of status. 
  • Whilst EU free movement ​continues to apply, a person may hold settled or pre-settled status and also exercise a right to reside under EU law.
​For more information, see our factsheet​

Benefit and housing entitlement

Eligibility​ rules that apply to EEA nationals and their family members are complex due to restrictions that prevent some groups from​ being able to receive benefits. The information below sets out how status acquired under the EU Settlement Scheme may affect benefit entitlement, following recent amendments to benefit and (in England) housing eligibility regulations that affect people with pre-settled status. It is likely that further legislative changes will be made when the UK's exit arrangements are confirmed and after any transition period ends. 

(1) Settled status (indefinite leave to remain) 
A person who obtains settled status can rely on this as a qualifying right to reside to demonstrate that they are eligible for any benefits that are subject to the right to reside requirement, for example, universal credit, housing benefit and child benefit. A person with settled status can also rely on this to meet homelessness and housing allocation eligibility requirements. 

(2) Pre-settled status (limited leave to remain)
Pre-settled status cannot be relied upon to meet the right to reside test when this must be satisfied to claim benefits and a person with pre-settled status will not be eligible for homelessness assistance or a housing allocation in England. 

In order to be eligible, the applicant must have a right to reside on another basis, which for EEA nationals will mean exercising a right to reside under EU law that is not excluded under the corresponding regulations, for example, as a worker or family member of a worker. 

Therefore, even when an EEA national or family member of an EEA national has been granted pre-settled status, they will be ineligible if they are:

  • Exercising the initial three-months right of residence 
  • Exercising the right to reside as a Jobseeker (unless claiming jobseeker benefits) 
  • The family member of one of the above
  • A Zambrano carer (non-EEA national with a derivative right to reside as the primary carer of a British citizen)
  • Not exercising a right to reside under EU law
This is also the case for EEA nationals who have not yet made an application under the EU Settlement Scheme and maintains the position that applied before the EU Settlement Scheme was introduced. 

Any person who has pre-settled status who applied for homelessness assistance or a housing allocation before 7 May 2019 will be able to continue their claim if they relied on having pre-settled status to meet the eligibility​ requirements.

The information here regarding housing eligibility applies to England only as different housing regulations apply in Wales, Scotland and Northern Ireland. We are not aware that any changes have been made to the regulations in Wales or Scotland, so it may be the case that a person with pre-settled status will be able to rely on that to be eligible for homelessness assistance or a housing allocation. However, the restrictions on benefits that are outlined here will still apply. 

(3) A no deal situation 
The Government has published the following information about benefits and housing entitlement that will apply if the UK leaves the EU without a deal: 

Impact on local authorities - social services' support 

When EEA nationals are ineligible for benefits and homelessness assistance, local authorities may be required to provide accommodation and financial support when social services’ duties are engaged, for example, when a parent with young children is unable to work, or when an adult develops care needs following an injury or due to a disability. Additionally, social services may also provide support to an EEA family at risk of homelessness when the parent is struggling to evidence their entitlement to benefits or is challenging a refusal of benefits. ​

EEA nationals who cannot work and are unable to return to their country of origin may require social services' support on a long-term basis, so securing settled status, where this is possible under the EU Settlement Scheme, should provide them with access to mainstream benefits and housing provision. 

EEA nationals who are only eligible for pre-settled status will need to be economically active in order to access benefits, so there remain significant gaps in benefit entitlement for those who are undertaking caring responsibilities and vulnerable adults who are unable to work due to a disability or illness. ​

Even though legislation exists that allows local authorities to refuse to provide social services' support to EEA nationals who can return to their country of origin, we have previously advised that this is inconsistent with the Government’s commitment to allow EEA nationals to remain in the UK permanently through the EU Settlement Scheme. It is also very difficult to apply this exclusion when the timeframes for qualifying under the scheme remain unclear, so there are likely to be fewer cases where local authorities can rely on return as a viable solution to the person or family's situation of destitution in the UK when statutory duties are engaged to provide support. 

Commentary

Obtaining settled status under the EU Settlement Scheme should ensure that EEA nationals are able to access mainstream benefits and housing even if they were previously ineligible for these. This may benefit some vulnerable groups, such as people who have been rough sleeping or were unable to work due to a serious injury or illness. 

However, by continuing to restrict access to benefits and housing to certain groups, vulnerable EEA nationals may still be at risk of homelessness and destitution if they can only secure pre-settled status because they have not lived in the UK for five years or are unable to evidence their residence​. Additionally, without clear guidance for benefit decision makers, there is a risk that incorrect decisions may be made. To date we are only aware of guidance that has been issued to Housing Benefit decision makers (Housing Benefit Circular 07/2019). The potential for misunderstanding an EEA national's​ entitlements, along with gaps in benefit provision for people who have been accepted by the Government as having a future in the UK through grants of pre-settled status, mean that there will be a continuing need for social services to provide support to EEA families and vulnerable adults who are at risk of homelessness and destitution. 

It is particularly important that vulnerable people who have been living in the UK for five years or longer obtain legal advice to help them to secure settled status, rather than opting for pre-settled status. The Home Office offers various services to assist people with making the application but these are not a substitute for immigration advice, which may still be required by people with complex cases. Children in care, non-EEA family members and people without a documented residence history are likely to need legal advice as well as practical assistance. The Government is due to announce which VCS organisations have been awarded grant funding to provide assistance to vulnerable groups, but, without legal aid for immigration matters, there are still going to be significant gaps in advice provision. ​People may also need signposting to a benefits adviser if they appear to have been incorrectly refused benefits. 

From speaking to local authority officers over the last few weeks, it is clear that information about the EU Settlement Scheme is not reaching frontline workers. It is essential that local authorities ensure they have communicated information about the scheme to residents and inform staff about how they can assist EEA nationals who are engaged with services to prepare for applying under the scheme. We have provided suggestions of how local authorities can to do this in our factsheet, ​which also sets out further information about the EU Settlement Scheme, legal advice and Home Office services. 

We are keen to hear from local authorities about any impacts on demand for social services support or difficulties that people with settled or pre-settled status may be experiencing when they are trying to access services they should be entitled to. Please get in touch with us at: nrpf@islington.gov.uk​.

Further information

This article was originally published on 30 April 2019 and has been updated to reflect that the new regulations are now in force.