This Insight was published before the UK left the EU. Since the end of the transition period on 31 December 2020, the rules around access to UK benefits for EU nationals have changed.

Earlier this month, the Guardian reported a “surge” in instances where EU nationals without UK citizenship were being refused Universal Credit. It said EU nationals have had benefits stopped “overnight” through “incorrect decisions” to refuse Universal Credit, with many left in debt and sleeping outdoors. It reported that, whilst “almost all” of the decisions which had been legally challenged were reversed on appeal, the lengthy wait for a decision had left many unable to pay for rent and food. Some welfare advisers claim this is evidence of a “hostile environment” in the benefits system.

In response, the Department for Work and Pensions (DWP) said it’s unaware of any increase in appeals of such decisions. It pointed out that there has been no change in the eligibility rules for Universal Credit since 2015. 

This Insight looks at the broader policy context around such media reports. It explains the rules around EU nationals’ access to UK benefits, including Universal Credit, and how these might be affected by Brexit.

What rights to UK benefits do EU nationals have?

EU law doesn’t require Member States to allow EU migrants unrestricted access to benefits. Broadly speaking, EU ‘treaty rights’ allow a person who moves between EEA states (and Switzerland) to access benefits in the host country if they are ‘economically active’ or ‘self-sufficient.’ These rules apply to nationals from a broader group of countries than the 28 EU Member States, but for simplicity, we will refer to ‘EU nationals’.

In the UK, a Habitual Residence Test was first introduced in 1994 for people from abroad making claims for certain benefits. Since 2004, EU nationals can’t be classed as ‘habitually resident’ in order to receive certain UK benefits, unless they satisfy the ‘right to reside’ requirement. This requirement applies to claims for a range of benefits including:

  • Income Support
  • income-related Jobseekers’ Allowance (JSA)
  • income-related Employment Support Allowance (ESA)
  • Pension Credit
  • Housing Benefit
  • Universal Credit
  • housing assistance from local authorities

For Child Benefit and Child Tax Credit, people who do not have a right to reside are treated as ‘not present’ in Great Britain and therefore not entitled to these benefits.

Income support, JSA, ESA, Housing Benefit, and Child Tax Credit are all known as ‘legacy benefits’ which are being replaced by Universal Credit.

How can EU nationals satisfy the ‘right to reside’ requirement?

An EU national can satisfy the right to reside requirement in a number of ways, including as a worker, a self-employed person, a jobseeker (but only for income-based JSA, Child Benefit and Child Tax Credit), a self-sufficient student, or as a family member of a person falling into one of these categories. 

People may also satisfy the requirement if they have a ‘derivative right to reside’ – for example, as a primary carer of a child in education. 

Some people who are not ‘economically active’ will only be able to demonstrate a right to reside as a ‘self-sufficient person’. This means they must have enough resources for themselves and their family members so that they are not dependent on the benefits system.

EU nationals can also acquire a right of permanent residence if they have resided legally in the UK for a continuous period of five years. A person is residing legally when they have a right to reside under one or more of the categories listed above (with some qualifications). Although this is not the case for someone with a derivative right to reside.

Once a person has a permanent right of residence, they no longer have to satisfy these conditions.

Are these rules the same for Universal Credit claimants?

Broadly speaking, yes.

The right to reside requirement applies to Universal Credit claims in the same way as for the benefits it’s replacing. However, from 10 June 2015, regulations came into force stating that an EU national can’t pass the Habitual Residence Test if their only right to reside is as a jobseeker, or a family member of such a person. These people, therefore, will not be entitled to Universal Credit. 

In written evidence submitted to the Work and Pensions Committee in February, the National Association of Welfare Rights Advisors (NAWRA) expressed a number of concerns (PDF 112 KB) about the how these rules are being applied to Universal Credit claimants who are EU nationals. The NAWRA reported that in many cases decision-making is “straightforwardly wrong” often due to a “poor standard of understanding of the relevant regulations”, leading many claimants into “extreme hardship.”

How does the new EU Settlement Scheme affect access to UK benefits?

Theresa May’s Government opened the new EU Settlement Scheme (EUSS) to all applications in March this year. This was to allow EU nationals and their families to reside in the UK after Brexit.

EU nationals who have lived in the UK for five years and who register successfully for the EUSS may be granted ‘settled status’. Those with settled status will now satisfy the right to reside requirement for benefits automatically. 

Those who have been in the UK for a shorter period of time can apply for ‘pre-settled status’. Once a person with pre-settled status has been in the UK continuously for five years, they may be eligible to apply for full settled status.

In May this year, the DWP issued benefits guidance (PDF 64 KB) which notes that, in accordance with new regulations which came into force that month, unlike settled status, those who have pre-settled status are not eligible to claim benefits automatically. Those with pre-settled status must therefore demonstrate that they have an existing qualifying ‘right to reside’ – such as worker status, as outlined above – to receive UK benefits.

In response to this, the Child Poverty Action Group (CPAG) argued that these regulations – in relation to those with pre-settled status – “may not be lawful” when applied to EU nationals. This, it says, is because case law provides that if an EU national has a right of residence under domestic law, then they cannot be treated differently to a UK national in terms of access to benefits. CPAG has therefore indicated an interest in mounting a legal challenge to these regulations.

How will Brexit affect access to benefits?

The Government is committed to implementing the EUSS, even if there is a ‘no-deal’ Brexit. EU nationals granted settled status should therefore have full access to UK benefits under any kind of Brexit scenario.  

According to EUSS guidance, if the UK leaves the EU with a deal, a person needs to have been residing in the UK by 31 December 2020 in order to register for the EUSS. The deadline for applications in this scenario is 30 June 2021.

However, if there is a no-deal Brexit, the Home Office says that residence in the UK must have begun before the UK leaves the EU, with the application deadline being “at least 31 December 2020.”

The Government has stated that, although it intends to repeal free movement from 31 October 2019, existing benefit access rules will continue for EU nationals who haven’t applied for the EUSS after free movement ends. Further details on this policy have not yet been announced.

The end of free movement may, however, affect associated rules on access to benefits for those who arrive in the UK after Brexit, although currently it is unclear how or to what extent.

Further reading

About the author: Andrew Mackley is a researcher at the House of Commons Library, specialising in social security policy.