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Published 15 Dec 2020

Councils likely to incur costs providing safety-net support to EEA nationals after free movement ends

We consider the implications of changes to benefit eligibility, housing entitlement, and the exclusion to social services' support after the end of the transition period on 31 December 2020.

Following the UK’s departure from the European Union, European free movement will no longer apply in the UK after the end of the transition period at 11pm on 31 December 2020.  After this date, European Economic Area (EEA) nationals and their family members will become subject to the UK’s immigration laws on the same basis as non-EEA nationals. Corresponding changes will be made to the legislation that sets out eligibility requirements for benefit and housing assistance, and to the exclusion that applies to social services’ support, which come into force at 11pm on 31 December 2020.  We consider what these will mean for councils. 

What will change? 

After 31 December, EEA nationals will broadly fall into three groups: 

  • People who have been granted settled or pre-settled status.
  • People who are entitled to apply under the EU Settlement Scheme by 30 June 2021, but have not yet applied or been granted status.
  • People who arrive in the UK on or after 1 January 2020 and are granted leave to enter for a specific purpose, such as to visit, work or study.

In order to establish eligibility for benefits and homelessness assistance, the current tests will continue apply to people who have been granted settled or pre-settled status. A person with pre-settled status (five years’ limited leave to remain) will need to be exercising a qualifying right to reside in line with the eligibility criteria. This means that a person who is not economically active, i.e. they are not in work or recently stopped working, will usually be ineligible.

For a person who was living in the UK prior to the end of the transition period but who has not yet applied under the EU Settlement Scheme, the rules regarding entitlement to benefits and homelessness assistance will be particularly complex. These rules will apply during the grace period, from 1 January to 30 June 2021, and beyond this period, where a person's EU Settlement Scheme application is still pending after 30 June 2021. A person in this position will need to demonstrate that they were exercising a right to reside, or had a permanent right of residence, immediately before the end of the transition period, as well as showing that they are exercising a qualifying right to reside in line with the eligibility criteria at the time of their benefit application. Those who are found to be ineligible may go onto qualify for benefits when they are granted settled or pre-settled status. 

EEA nationals arriving on or after 1 January 2021 will be subject to the ‘no recourse to public funds’ (NRPF) condition when they are granted leave to enter as a visitor, student, or worker. They will be deemed to be ‘subject to immigration control’ under section 115 of the Immigration and Asylum Act 1999 and will be excluded from claiming any benefits that are classed as ‘public funds’, and assistance under Parts VI and VII of the Housing Act 1996. An EEA national who is unlawfully present will also be 'subject to immigration control' and will be excluded from claiming public funds. 

There is also an important change that will affect entitlement to accommodation and financial support provided by social services when an EEA national is ineligible for benefits, is destitute, and has children in their household or care needs. Schedule 3 of the Nationality, Immigration and Asylum Act 2002 will no longer apply to an EEA citizen on the basis of their nationality. Instead, the exclusion will only apply to an EEA national who is ‘in breach of immigration laws’. This means that the exclusion will not apply when an EEA national has settled status, pre-settled status, or leave to enter as a visitor. In such cases, eligibility for support will be determined through a needs assessment.

A human rights assessment will only be required when an EEA national is 'in breach of immigration laws'. There will only be limited circumstances when this is likely to apply to an EEA national, and councils are unlikely to encounter many people in this position before the end of the grace period (30 June 2021). We will be publishing updated guidance about human rights assessments in due course. 

For more information about these changes, see our factsheet: supporting EEA nationals after the Brexit transition period

What does this mean for councils? 

When an EEA national applies for benefits or homelessness assistance after 31 December, decision makers will need to establish whether the person has settled or pre-settled status, and will need to distinguish people who qualify to apply EU Settlement Scheme from those who enter as a visitor or with a visa under another category. This is likely to be challenging, as no physical documentation will be issued to EEA nationals and many post-December arrivals will enter as visitors through e-gates. 

EEA nationals will be at risk of being found to be ineligible for benefits when they have pre-settled status, or have not yet been granted status under the EU Settlement Scheme, and are not able to work or evidence their worker status. The majority of new arrivals post-December 2020 will be subject to the NRPF condition and unable to claim Universal Credit if they cannot support themselves through employment or their own resources. 

As a consequence, social services’ safety net support will provide a vital lifeline for destitute EEA nationals with children or care needs who are ineligible for benefits. In some cases, this support may need to be provided on a long-term basis, for example, when a parent is unable to work in order to become eligible to claim benefits but is four years away from qualifying for settled status. In such cases, the local authority will not be required to undertake a human rights assessment and will not be able to withdraw support on the basis that the family could return to their country of origin to avoid destitution in the UK. 

When duties are engaged to provide accommodation and financial support to families with children or adults with care needs, local authorities will need to meet these costs from their own budgets. The Home Office's impact assessment identified this situation as a risk, stating:

‘Potential negative impacts of this measure should be mitigated through the requirement for migrants to have funds to support themselves when coming to the UK. Nonetheless there could be unintended consequences if migrants fall on hard times and need to rely on local authorities or the voluntary sector for support. This impact is too uncertain for any robust estimate to be made.’

Data from NRPF Connect on households supported by social services showed a small increase in the number of EEA nationals receiving support during the last financial year. Whilst people with pre-settled status continue to be denied full access to benefits until they obtain settled status, and as new groups will have no recourse to public funds when they enter the UK with this condition or become unlawfully present, it is highly likely that local authorities will see a further increase in the number of EEA national families and adults with care needs requiring social services’ support, particularly whilst the economic impacts of the Covid-19 pandemic continue to be felt. EEA nationals who do not have children in their household or social care needs may be left without any access to support and at risk of rough sleeping if they cannot work and/or access benefits. 

What can councils do to prepare for the changes? 

It is now a matter of urgency that affected residents who have not yet applied under the EU Settlement Scheme secure their future right to remain in the UK before the deadline of 30 June 2021. There are a number of steps councils can take to assist residents and to prepare for the changes:

  • Continue to communicate information about the EU Settlement Scheme to residents. 
  • Identify and support EEA nationals and family members of EEA nationals who are engaged with council services to apply under the EU Settlement Scheme as soon as possible in order to establish a clearer entitlement to benefits and other services. 
  • Ensure that staff in housing and social services departments are aware of the changes to eligibility rules that will apply from 1 January 2021. 
  • Consider what ongoing communications may be needed to remind people who have obtained pre-settled status that they need to apply for settled status as soon as they have lived in the UK continuously for five years or, at the very latest, before their leave to remain expires.  

What are we doing to support councils? 

We have summarised information about the changes in our factsheet and will keep local authorities updated with any further developments. We will update users of NRPF Connect about what information they will be able to obtain from the Home Office over the system in relation to EEA nationals. 

We will continue to monitor demand for social services’ support through the collective data on NRPF Connect, and will also work with sector partners to highlight the consequences of these changes and the need for people with pre-settled status to have full access to benefits. 

Update - 18 December 2020

The Court of Appeal has ruled today that it is unlawful for the Government to make regulations that exclude EU nationals with pre-settled status from qualifying for Universal Credit. The case of Fratila & Tanase v Secretary of State for Work and Pensions was brought by the Child Poverty Action Group, who have provided a comprehensive summary of the case. This decision could affect a number of people with pre-settled status who are currently supported by local authorities under the Care Act, section 17 of the Children Act 1989, or through 'everyone in'. We will update our factsheet when we are clearer about the scope of the judgment.