Contents
Preface 2
EEA-nationality 3
Habitual Residence Test 4
Social security in the UK 5
Health care 6
Statutory sick pay (SSP) 7
Employment and Support Allowance Employment and Support Allowance (ESA) 7
Contribution based ESA or Income related ESA 7
Jobseeker’s Allowance 8
Contribution or income based JSA 8
Genuine prospect of work (GPoW) 9
Pension Credit 9
Housing Benefit 9
Council Tax Reduction 10
Child Benefit 10
Income Support 11
Universal credit 11
Sources 11
Preface
When working in St. Mungo’s Broadway it became apparent that there was a growing group of European Union citizens (EEA-nationals) who could no longer provide for them self and were required to claim benefits. The Polish ladies I’ve worked with came to the UK to work but as a result of serious alcohol and drug addictions they lost their jobs and homes. Their addiction made them physically ill and they were no longer able to care for them self, let alone find and keep a job. The Polish ladies were, unlike their UK peers, obligated to keep applying for jobs almost weekly. Even though it was obvious that the chances of the ladies finding a job were nihil. Not only because of their addictions but also because of the fact that they didn’t speak a word of English. Seeing these ladies struggle with their application forms and “work-books ” made me wonder…
What’s the deal with the Social security of EEA-nationals in the UK?
First I will discuss the rights of EEA-nationals, second I will discuss the social security system of the UK and if EEA-nationals are eligible, and last I will go into some special cases.
EEA-nationality
Article 20 of the treaty of the functioning of the European Union gives every citizen from a European Union country the right to be a citizen of the European Union. This EEA-nationality gives the barer complementary rights. The complementary rights EEA-nationals derive from this treaty are:
• Freedom of movement. Article 21
• Active and passive suffrage. Article 22
• Diplomatic and consular protection in a third country by a member state if the citizen’s country is not represented there. Article 23
• The right to petition the European Parliament, or to apply to the European Ombudsman. Article 24
The freedom of movement is, in the context of this paper, the most important right. In DIRECTIVE 2004/38/EC the freedom of movement is elaborated. Article 7 of this directive states that it is possible for the EEA-nationals to reside for more than three months in a Member state if the EEA-nationals is a worker, has sufficient resources and will not be a burden to the social assistance system of the host country or is a student.
If you read article 7 sub 2 it is easy to think that EEA-nationals are not entitled to benefits because they’re no longer working and they can’t be a burden to the social security system. And if the EEA-national is no longer working the citizens right to reside ends. However further down the article states that even though an EEA-nationals is no longer a worker he can have same rights/status as a worker in some situations:
(a) he/she is temporarily unable to work as the result of an illness or accident;
(b) he/she is in duly recorded involuntary unemployment after having been employed f or more than one year and has registered as a job-seeker with the relevant employment office;
(c) he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job-seeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months;
(d) he/she embarks on vocational training. Unless he/she is involuntarily unemployed, the retention of the status of worker shall require the training to be related to the previous employment
If one of the above conditions are met a EEA-nationals who lost their jobs can still have the right to reside. They are considered retained workers. UK law further states that a retained worker status has he who:
Has registered as a jobseeker with the relevant employment office and
2. Is in duly recorded involuntarily unemployment after having been in genuine and effective employment in the UK for less than one year and
3. Can provide evidence that they are seeking employment and have a genuine chance of being engaged will only retain worker status for a maximum of 6 months starting with the first day of duly recorded involuntary unemployment.
Or
He who has registered as a jobseeker with the relevant employment office and
2. Is in duly recorded involuntary unemployment after having been in genuine and effective employment in the UK for a year or more and
3. Can provide evidence that they are seeking employment and have a genuine chance of being engaged retains worker status for 6 months starting with the first day of duly recorded involuntary unemployment. After that they can only retain worker status if they can provide compelling evidence that they are continuing to seek employment and have a genuine chance of being engaged
Article 23 from the DIRECTIVE 2004/38/EC gives EEA-nationals, who have the right to reside on the ground of the directive, equal rights as those of the host country citizens. If a national citizen is entitled to benefits or social security, an EEA-national with the right to reside on the freedom of movement conditions is, in light of the equal treatment, entitled to access to benefits and social security.
For some benefits like Jobseekers allowance it is important that an EEA-nationals resides in the UK, to test if someone resides in the UK a Habitual residence test can be conducted.
Habitual Residence Test
An EEA-national who has the right to reside and is qualified as worker has the same rights as the UK-citizens however it could be that it is not quite clear if the EEA-national has the right to reside or is qualified as a worker. When an EEA-national is applying for benefits it could be that, because there is doubt about his right to reside, he is asked to do a Habitual residence test (HRT). The HRT tests to see if an EEA-national is a habitual resident. It shows if an EEA-national has the right to reside and if he or she is or wants to settle in the UK. When an EEA-national is considered a habitual resident he might be entitled to all sorts of regulations in the UK social security system. The definition of habitual resident isn’t clearly defined. To test if someone is settled or wants to settle a decision maker will look at different factors for example, the reasons for coming to the UK, is the individual working in the UK and how long the intended stay of the individual is.
Not only will the decision maker look at your settlement plans he will also look at how much the individuals life is based in the UK. They will look at things like:
• Owning property in the UK
• Personal possessions are mostly in the UK
• Family and relatives here
• Registered with a GP and dentist
• Opened a bank account here
The decision maker will take a lot of different facts into consideration to decide whether or not the applicant is a habitual residents, this because there isn’t a precise definition. It is therefore important that if an individual is asked to do the HRT he hands in as much evidence as possible. As said before an important part of being a habitual resident is the right to reside. The right to reside can derive from EEA-law. It is important to note that in some cases although a person has the right to reside they’re not considered habitual residents. This is for example the situation for EEA-jobseekers who aren’t considered habitual residents for the first three months of their stay.
Social security in the UK
Social security is a national system that provides in the care/income of those who are (temporary) not able to care for themselves. The social security system in the UK includes:
• The National Insurance Scheme (NIS), which provides cash benefits for sickness, unemployment, death of a partner, retirement, etc. People earn entitlement to these benefits because they pay National Insurance contributions;
• The National Health Service (NHS), which provides medical, dental and optical treatment and which is normally available free of charge to people who live in Great Britain and Northern Ireland;
• The child benefit and Child Tax Credit schemes, which provide cash benefits for people bringing up children;
• Non-contributory benefits for disabled persons or their carers;
• Statutory payments by employers to employees when a child is born or placed for adoption.
Figure 1. Organisation of social protection
As you can see in the chart the department of work and pensions (DWP) is the biggest party in the UK social security system. They carry out most of the welfare and pension related benefits. The DWP delegated these responsibilities to four organizations: The Jobcentre plus, The Pension service, Disability and Carers service and the Child maintenance group.
To guarantee that good healthcare is available to all, regardless of wealth, the department of healthcare launched the National healthcare system in 1948. Most primaries and secondary healthcare is free for UK residents.
Social security is there for those who are not able to care or provide for themselves. We will now discuss the different social security options the UK provides.
Health care
As said before the UK knows a free health care system named the National Healthcare System. Because of the equal treatment or non-discrimination for EEA-nationals the same obligations and right’s apply as those of the UK-citizen. This means that if an EEA-national resides in the UK they are entitled to free health care under the NHS. The NHS covers nearly all doctors, GP, opticians and dentist. It is however important to check whether one is indeed being treated under the NHS. A lot of doctors also work in private healthcare and private treatment is not refundable by the NHS. Under the NHS it is normal that some charges, prescribed medicines or dental services, are paid by the patients.
If an EEA-national is not residing in the UK but is only there temporarily, a valid European Health Insurance Card (EHIC) from their home country can give the right to treatment. Having an EHIC allows one to seek treatment which is clinically necessary in order to prevent one having to return home before their intended stay.
Statutory sick pay (SSP)
If an employee gets sick there can be a right to apply for statutory sick pay from the employer. An employee is he who works under an employment contract and has worked for the employer. The right to SSP starts after the employee has been sick for four consecutive days, these days includes sickness on official holidays and other non-working days. The employee is obligated to inform the employer of his sickness before the employer’s deadline or within 7 days if there is no deadline. If the employee is sick for more than seven days he has to provide a doctor’s fit note. Another qualification for receiving SSP is that the employee has to earn at least £112 before tax per week. The employee can receive SSP for a maximum of 28 weeks.
If there is no right to SSP the employee might apply for ESA.
Employment and Support Allowance Employment and Support Allowance (ESA)
ESA is the UK’s incapacity benefit. If someone is incapable of work because of illness or disability for more than four days and there is no or no longer entitlement to statutory sick pay one can claim ESA. Other conditions for receiving ESA are: not receiving a Jobseekers Allowance being under pension age and not receiving maternity pay.
To qualify for ESA a claimant has to perform a work capability assessment, this assessment is to see to which extend the claimant’s sickness or disability is affecting the capability to work. The assessment places the claimant in one of two categories:
• Work-related activity group, where the claimant is obliged to perform work-related activities.
• Support group, where the claimant doesn’t have to perform work-related activities.
The support group is for those incapable of working and the work-related group for those who, although sick, are expected to do their best to find work. A person in the work-related activity group has the obligation to go to interviews or do work-related activities. They get an adviser and together they make a personalized plan. If they don’t meet the obligations, as set by their adviser, they can receive a sanction on their ESA.
Contribution based ESA or Income related ESA
There are two types of ESA the contribution based ESA, which has a few contribution conditions, and the income related ESA. The two types are not based on the capability to work but on whether or not the contribution conditions are met. The conditions for the contribution based ESA are:
• in one of the last two complete tax years, have paid Class 1 contributions to the value of 26 times the lower earnings limit; and
• In both of the last two complete tax years, have paid or been credited with, Class 1 contributions to the value of 50 times the lower earnings limit.
In the work-related activity group contribution based ESA can last for a year. In the support group there is no limit for how long one can receive contribution based ESA. If an EEA-national has met the contribution conditions he or she can apply for contribution based ESA without having to perform an HRT this is different when the contribution hasn’t been paid.
Income related ESA is the successor for contribution based ESA or the main or only benefit when the contribution conditions aren’t met.
The differences between the two types, except for the conditions of receiving them, are that for the amount of contribution based ESA there will only be looked at if the contribution requirements are met and not at other income sources like a savings account or a partner who still earns has an income. The amount of income related ESA is a mean tested benefit and so dependent on whether or not one has other income sources. The amount gets lower if there are. Other income sources can be a saving account or other people in the household.
If an EEA-national has a retained worker status and is temporarily unable to work and he or she didn’t meet the condition for receiving contribution based ESA they can receive income based ESA for a period of 6 months (as long as their retained worker status) if they are considered habitual residents (see chapter one).
Jobseeker’s Allowance
In the UK an unemployed or partially unemployed person looking for work can apply for a Jobseeker’s Allowance (JSA). JSA supports the unemployed who are available for work and actively seeking employment. The conditions to receive JSA are:
• Actively seeking employment
• Available for work
• Not being in fulltime education
• Age between 18 and retirement age (exceptions can be made for 16 and 17 year olds)
• Working less than 16 hours per week
• Being in England, Scotland or Wales
• For EEA-nationals there is the extra condition of not being voluntarily unemployed. This means that it can’t be the unemployed fault that he or she lost its job.
When a claim is approved a work coach and the unemployed make a plan to find a job. This to record progress and to help the unemployed prove he or she is actively seeking for work. The unemployed is obliged to go to a job centre every two weeks and show the work coach what he or she has done to find a job. It is important that the unemployed proofs he is actively seeking work, for example he or she can do this by bringing job applications or interviews.
Contribution or income based JSA
There are two types of Jobseeker allowances, contribution based JSA (JSA(cont)) or income based JSA (JSA(IB)). As the name implies JSA(cont) is dependent on whether or not the unemployed has paid enough contribution. When working in in the UK one pays a contribution to the national insurance. If the unemployed paid enough Class 1 national insurance contribution in the two years prior to the unemployment he or she can receive up to 6 months of JSA(Cont). The amount of contribution that has to be paid is:
• in one of the last two complete tax years, have paid Class 1 contributions to the value of 26 times the lower earnings limit; and
• in both of the last two complete tax years, have paid or been credited with, Class 1 contributions to the value of 50 times the lower earnings limit
When an unemployed hasn’t met the requirements for receiving JSA(cont), was self-employed or when the JSA(cont) stops income based JSA is available. The unemployed can get income based JSA if all the following requirements are met:
• you work less than 16 hours per week on average
• your partner (if you have one) works less than 24 hours per week on average
• you have £16,000 or less in savings
• An EEA-national who came to the UK looking for work and has registered as a jobseeker at a Job Centre and is a Habitual resident
When receiving income based JSA the unemployed might also be eligible to get help with the cost of mortgage, home loan or rent. The amount of JSA is £57.90 per week for those under 25 and £73.10 per week for those over 25 and under state pension age.
When an EU-national applies for JSA the HRT-test can be imposed. An EEA-national who met the contribution conditions does not have to perform the HRT however to receive JSA(IB) it is a condition to be a habitual resident. In the first chapter I discussed the conditions and procedures of being a habitual resident. When the conditions are met and it is clear that the unemployed EU-national has a right to reside and is considered habitual resident there can be a right to JSA for six months or longer when there is a GPoW.
Genuine prospect of work (GPoW)
When an EEA-national is unemployed and claiming JSA for 6 months with a retained worker status or for 91 days as a jobseeker they will lose their EU right to reside. However if they can provide a genuine prospect of work (GPoW) A short extra period of JSA(IB) will be allowed. They can get a GPoW if they can provide compelling evidence that there is a genuine chance of getting a job. With a GPoW the right to reside can be extended and so will be the retained worker status.
Pension Credit
The Pension Credit is the principal element of the UK welfare system for pension aged poorer people. The Pension credit has 2 parts, Guarantee Credit and Savings Credit for both of these it is a qualification that the applicant or his or her partner has reached pension credit age. Pension credit age is 65 but is slowly going up to 66.
Guarantee Credit is for the elderly (above pension credit age) who have an income below £151.20 (for single people) or £230.85 (for couples). The income will be topped up until this amount
The other part of the pension credit is the Savings Credit. Saving credit is for the elderly who saved some money for their retirements.
Because of the non-discriminatory article in the EU treaty of the functioning of the European Union if the EU-national has the right to reside and thus is an EEA-nationals minimum resource benefits are available.
Housing Benefit
Housing benefit may be received by people with a low income to help paying their rent. Those on a low income, unemployed or not, and with a capital below 16.000, – might be eligible. Not everybody on a low income is eligible for housing benefit. Someone is not eligible if:
• They live in the home of a close relative
• They are a full-time student – unless you’re disabled or have children
• They are residing in the UK as an European Economic Area jobseeker
• They are an asylum seeker or sponsored to be in the UK
• They are subject to immigration control and their granted leave states that they can’t claim public funds
How much the applicant receives depends on a few conditions. Is the house rented by the council or is it a social renting house there will be looked at:
• The eligible rent.
• The presence of a spare room.
• The household income – including benefits, pensions and savings (over £6,000).
• Personal circumstances, for example the age of people in the house or if someone has a disability.
If it concerns a private rental property Local housing allowance (LHA) is used to work out the amount of Housing Benefit. The LHA looks at
• Where the individual lives.
• The household size.
• Income – including benefits, pensions and savings (over £6,000).
• Personal circumstance.
As read above EEA jobseekers are not eligible for housing benefit. It is important to note that this applies only to jobseekers who have not worked in the UK yet. Those who passed the HRT or EEA-jobseekers who have a retained worker status according to article 7 sub2m of the EU treaty of the functioning of the European Union might be eligible for housing benefits.
Council Tax Reduction
Council tax has to be paid by all residents to the local authority for local services like rubbish collection, police, libraries and highways. For those on a low income there is the possibility to ask the council for a reduction of the council tax. The way this reduction is applied depends on where someone lives. Every local authority has its own local scheme because of it is best to visit the council’s website to find out if someone is eligible for council tax reduction.
To be eligible for council tax reduction as an EEA-national it is again important to pass the HRT
Child Benefit
Child benefit is a social security payment in the UK for parents with children under 16, between 16 and 19 in full time education or 16 or 17 years old who has recently left education or training but are registered for certain work or training. To be eligible for child benefit one must be responsible for the child. One is considered responsible for the child if one lives with them or one is paying at least the same amount as Child Benefit (or the equivalent in kind) towards looking after them. For EEA-nationals an important extra condition is (as with most benefits for EEA-nationals) that they have to have the right to reside in the UK and have their main home in the UK (passed the HRT).
Child benefit is paid monthly or weekly. Usually it is paid monthly but for parents getting Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Pension Credit and single parents it is possible to receive weekly payments. The amount of child benefit depends on the number of children. For the eldest or only child the allowance is £20.70 per week for every additional child it is £13.70 per child.
Applying for Child benefit is possible at a local child benefit Office.
Income Support
People in the UK on a low income, employed or not, can be eligible for income support. Income support, as it says in the name, is a support to the income. There are five cumulative conditions:
• Pregnant or a carer or a lone parent with a child under 5 or, in some cases, unable to work because you’re sick or disabled.
• Between 16 and the pension credit age.
• No income or a low income and no more than £16,000 in savings (your partner’s income and savings will be taken into account).
• Working less than 16 hours a week and your partner must also work less than 24 hours a week (you may still qualify if you do unpaid voluntary work or go on parental or paternity leave).
• Living in England, Scotland or Wales – there are different rules for Northern Ireland
An individual cannot receive income support when one of the following conditions applies:
• Receive a Jobseeker’s Allowance or Employment and Support Allowance
• Is a young person being looked after by a local authority (unless you’re a single parent)
• Have savings above £16,000
• Need permission to enter the UK
Income support has two parts, a basic payment and extra payments. The basic payments variable and depends on the living situation (single or couple), age (under of above 18) or special circumstances (single parent). Income and savings can also affect the amount of the basic payment.
One can be eligible for extra payments if their partner is of pension age or if they are a carer or are disabled.
Income support for EEA-nationals is available if they qualify as a habitual resident.
Universal credit
Universal credit is a social security benefit that is gradually being implemented through the UK, it is going to replace six means tested benefits. The benefits it is going to replace are: Jobseeker’s Allowance, Housing Benefit, Working tax credit, Child Tax credit, and Income based employment and support allowance and income support. When someone is already receiving one or more of these benefits they will likely get an invitation to claim universal credit as the implantation goes.
For now universal credit is only available for claimants living in Scotland Wales or England. The conditions to be eligible for universal credit:
• Earn less than £338 (after tax) in the next month.
• Be between 18 years old and 60 years and 6 months old.
• Be a British citizen (non-British citizens can apply in some places).
• Have a National Insurance number.
• Have less than £6,000 in savings or other investments, for example shares, or property that one doesn’t live in. This is increased to a £16,000 limit in certain areas.
When living together both partners have to be eligible. The partners can have a higher income together (£541after tax) but the amount of savings or other investments are the same. Besides the conditions to be eligible universal credit has a lot of grounds for exclusion:
• One isn’t able to work or look for work (eg because of illness or disability)
• One lives in supported or temporary accommodation
• Homeowner
• One has applied for a fitness for work note from a doctor
• Pregnant or given birth within the last 15 weeks
• One has caring responsibilities, for example for a disabled person
• Self-employed, or expect to earn money from self-employment in the next month
• Company director or part of a limited liability partnership
• One is in education or on a training course of any kind
• One is part of the same household as a member of the regular or reserve forces who’s away on duty
• The one who pays child maintenance via the Child Support Agency
• Approved foster parent (even if you have no foster children)
• Expecting to adopt a child in the next 2 months
• One has adopted a child within the last 12 months
• Homeless
EEA-nationals can only be eligible for Universal Credit is, as with most UK benefits, if they have the right to reside.
Sources
Decision makers guide Chapter C1, International issues, www.gov.uk/government/uploads/system/uploads/attachment_data/file/598378/admc1.pdf, seen on 06-02-2017
Decision makers guide Vol 2 Amendment 35, October 2016, Part 3 Habitual residence & right to reside – IS/JSA/SPC/ESA 9
European Commission Employment, Social Affairs and Equal Opportunities your social security rights in the UK, 2011
Nicole Timmins, Universal credit? From disaster to recovery, September 2016, www.instituteforgovernment.org.uk/sites/default/files/publications/5064%20IFG%20-%20Universal%20Credit%20Publication%20WEB%20AW.pdf, seen on 06-02-2017
Martin Williams, Kapow to the GPoW, April 2015, www.cpag.org.uk/sites/default/files/CPAG-Kapow-GPOW-APR2015_0.pdf, seen on 13-02-2017
Missoc, Organisation of social protection UK, 01-07-2015 www.missoc.org/MISSOC//INFORMATIONBASE/COUNTRYSPECIFICDESCS/ORGANISATION/2015_07/UK-Org-07-15-EN.pdf, seen on20-02-2017
Treaty of the functioning of the European Union
www.gov.uk/browse/benefits
www.citizensadvice.org.uk