‘We have no idea how we are going to survive financially’: loophole in ‘settled status’ scheme leaves EU nationals blocked from Universal Credit Government accused of breaking terms of Brexit Withdrawal Agreement after EU nationals refused access to Unviseral Credit

A loophole in the Universal Credit application process has left many EU nationals with pre-settled status without any form of Government support during the coronavirus crisis, despite being eligible for the benefit.

European citizens who have lived in the UK less than five years can apply for pre-settled status, which allows them to remain in the country with the same rights as UK citizens until they are resident long enough to apply for settled status.

They are still eligible to receive Universal Credit but, unlike those with settled status, they have to prove their “right to reside”, such as by being a jobseeker or worker.

As a result, some who have lost jobs or work due to the Covid-19 lockdown have found themselves unexpectedly rejected by the system and left without any income or access to funds.

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‘The Government measures don’t protect me’

Robert (not his real name) is one of the people affected by this issue. He, his pregnant partner and their child moved to the UK in 2019 where, after being granted pre-settled status, he began work as a self-employed trader.

After the coronavirus pandemic hit he found himself without any clients and, as he set up his sole trader company after 6 April 2019, he is not eligible to receive help through the new Government measures.

“There is a big uncertainty of not knowing when I will be going back to work as a self-employed or finding a way to pivot my job to generate income,” he said.

“In the meantime, I have to pay rent, bills and buy food for my family without fear of any financial difficulties under this crisis.

“I know that the UK Government is doing its best to support citizens during this unprecedented time and under these difficult circumstances. However, a recently announced package of measures by the Government to support the self-employed on 26 March is not covering me.”

‘We are having a baby in May’

He applied for his only remaining option – Universal Credit – but, due to his pre-settled status, did not match the criteria.

“My Universal Credit application was rejected on the basis that I have failed the habitual residence test because I am a ‘jobseeker’,” he said. “My wife is pregnant to our second child and we are expecting the delivery of our baby boy in mid-May.

“This supposed to be a very exciting time for our family, however under these uncertain circumstances it’s a very fearful and stressful for us as we have no idea how we are going to survive financially in the coming weeks or months.”

Robert got in touch with the Citizens’ Advice Bureau but was told he would have had to work a minimum of three months before being eligible for Universal Credit.

He also contacted his local council to apply for a reduction in council tax but was told that they cannot reduce it because his Universal Credit claim had already been refused.

‘Those with pre-settled status have extra hurdles’

A spokesman for the Department of Work and Pensions said any EU national can make a claim for Universal Credit and are able to access benefits in the UK on the same basis as they were before.

But campaign group The3Million believe Robert is one of many who are struggling to access benefits nonetheless.

Luke Piper, policy officer at The3Million said: “The settled status scheme was set up to give people the rights of the Withdrawal Agreement and, under that, the right to be treated equally to British citizens. Included in that are equal rights to access help from the state.

“The problem is they are not. The way the law works is that people with pre-settled status have extra hurdles and have to go through and extra tests before they can access benefits. And this is acutely felt at the moment because people have lost their jobs and incomes.”

Those with pre-settled status would have their rights protected, but they do not automatically qualify as a resident when it comes to welfare. Anyone seeking Universal Credit must pass the “habitual residence test” to prove they are resident in the UK in order to receive funds.

Covid ‘exacerbated’ the issue

Mr Piper explained: “If I have pre-settled status and I lose my job, or have not been working in a while, and go to a job centre, they will say, ‘Sorry your pre-settled status doesn’t give you access to benefits, you need to pass these other tests instead to show you are working or trying to get a job’. They are an extra burden to people… they have to meet this higher legal threshold.”

He said the group has been aware of this issue for some time but, because of the current situation, felt it was becoming more urgent and decided to contact the European Commission and UK Government.

“It is a problem that existed before Covid-19,” he said. “But the issue has been exacerbated and amplified because of it,” he said. “It’s too early to say how may people it impacts, but the bottom line is more people ale losing their jobs, and more people are going to claim benefits and, amongst those, there are going to be EU citizens.”

The campaign group said another EU national who contacted them for help is a musician who lost their job in January 2020 and, in the current crisis, cannot get new clients.

‘I don’t know how to pay my rent’

Alex (not his real name) was also rejected for Universal Credit and his account was closed meaning he is now unable to appeal against the decision, the group said.

Alex said: “I literally don’t know how I am going to manage paying the rent at the end of the month. I have applied for Universal Credit but my claim was closed as I only have pre-settled status and I failed the habitual residency test.

“My journal on Universal Credit account is also closed so I cannot appeal against that decision.”

Currently more than a million EU nationals living in the UK hold pre-settled status and The3Million said it is concerned that this issue could be impacting scores of others who are yet to come forward.

The group have written to Home Secretary Priti Patel and Work and Pensions Secretary Thérèse Coffey, warning the current difficulties EU nationals are facing are a violation of the Withdrawal Agreement and the UK’s promise to protect the rights of EU citizens living in the country.

In the letter, the group outlined the purpose of the EU Settlement Scheme was to ensure that anyone granted any status would be treated in accordance with the Withdrawal Agreement which “sets out that citizens granted status as part of the UK’s obligations under the citizens’ rights part will have protection from discrimination and be treated equally to British citizens”.

EU citizens wrongly denied equal treatment set out Withdrawal Agreement Yesterday we sent letter to the Secretary of State for the Home Department & Secretary of State for Work and Pensions raising the issue of EU citizens not being able to get the help they need, incl. benefits pic.twitter.com/tyxntQhimY — the3million (@the3million) April 20, 2020

Breach of Brexit deal

“This is required by Article 23 of the Withdrawal Agreement, and specifically includes access to social assistance,” the letter adds. “We have written confirmation from the European Commission that anyone granted such status is entitled to the rights as set out in Part II of the Withdrawal Agreement.”

“Whilst citizens with Settled Status via the EU Settlement Scheme pass the right to reside test, citizens with pre-Settled Status do not. Some of their applications are refused,” the group said. “This is the effect of Regulation 9(3)(c)(i) of the Universal Credit Regulations 2013. This regulation aims to deny citizens with EU Settlement Scheme status equal rights with British citizens.

“The outcome is that citizens with pre-settled status – who have been granted the legal right to reside in the UK – are being discriminated against compared to British citizens. This appears to be in contravention of the UK’s obligations under the Withdrawal Agreement, in particular Article 23.”

Co-founder Maike Bohn said: “The UK is not delivering what was agreed under the Withdrawal Agreement. People aren’t able to get the help they need, including benefits. That is so important in times of crisis like Covid where families are facing great hardship.

“The UK’s incorrect implementation of the Withdrawal Agreement potentially leaves thousands of EU citizens destitute, without a safety net. We urge the government to remove all bureaucratic hurdles for EU citizens.”

A Government Spokesman said: “It’s wrong to suggest people are not getting Universal Credit because of their pre-settled status. EU citizens in the UK are able to access benefits and services in the UK on the same basis as they were before.

“We have made an unequivocal guarantee to EU citizens in the UK by protecting their rights in UK law through the Withdrawal Agreement Act and the EU Settlement Scheme.”