Restricting In-work Benefits – Should EU Migrants Be Concerned?

Earlier this week, David Cameron formally set out his demands for renegotiating the UK's membership of the EU in a letter to the president of the European Council Donald Tusk.

The four key negotiation points are as follows:

• Protection of the single market for Britain and other non-euro countries
• Boosting competitiveness by setting a target for the reduction of the "burden" of red tape
• Exempting Britain from "ever-closer union" and bolstering national parliaments
• Restricting EU migrants' access to in-work benefits such as tax credits

In-work Benefits – Separating the Facts from the Spin

The most controversial of these demands is the restriction of migrants’ access to in-work benefits.

David Cameron has stated:

"But we need to go further to reduce the numbers coming here. As I have said previously, we can reduce the flow of people from within the EU by reducing the draw that our welfare system can exert across Europe. So we have proposed that people coming to Britain from within Europe must live here and contribute for four years before they qualify for in-work benefits or social housing. And that we should end the practice of sending child benefit overseas."

To garner public support, on Monday night, the Government released a set of selective figures to The Times that stated 43% of EU immigrants drew benefits during their first years in the UK.

However, by the time the Department of Work and Pensions released the data, the figures had changed to ‘between 37%-43% of EU migrants received some sort of welfare, a much broader figure.

So what exactly are the facts? How many EU migrants are claiming benefits? Will creating a time-limit before EU migrants can claim in-work benefits and social housing really deter those coming to the UK in search of better-paid Employment and higher living standards?

What are In-work Benefits?

If you are working, but on a low income, you may be able to claim benefits or tax credits from the UK Government to top up your income.

If you work 16 hours or more a week, you may be entitled to Working Tax credits. This will depend on your circumstances and how much money you have coming in. You may also be entitled to other benefits, for example, if you are on a low income, you could get some Housing Benefit and Council Tax Reduction to help with rent and Council Tax. If you have children, you can claim Child Benefit, and you may also be entitled to some Child Tax Credit.

How Many EU Migrants Currently Receive In-work Benefits?

Despite the Government merrily throwing out figures to try and convince the public that the UK benefit system is buckling under the weight of non-UK beneficiaries, the fact is that obtaining relevant figures in this area is extremely difficult.

The Guardian newspaper has stated that it has been trying to obtain the correct figures regarding how many EU migrants who have been in the UK for less than four years are receiving in-work benefits and tax credits since August. The HMRC, the Treasury and the Department for Work and Pensions have all refused to release the information, and one must ask the question, “why?”

Are Benefits a ‘Pull Factor’, Attracting More and More Foreigners to Britain?

Not according to research done by IZA World of Labour. Their findings suggest that;

“Immigration decisions are not made on the basis of the relative generosity of the receiving nation’s social benefits. Even when immigrants are found to use welfare more intensively than natives, the gap is mostly attributable to differences in social and demographic characteristics between immigrants and non-immigrants rather than to Immigration status per se. Moreover, evidence in some countries suggests that immigrants exhibit less welfare dependency than natives, despite facing a higher risk of poverty.”

Migrants from the EU come to the UK for two major reasons:

• More work with better pay; and
• A higher standard of living

The average net monthly wage of a Polish worker is €634.49 compared to €2,810.26 in the UK. Romanians get by on an average of €345.56 per month. Looking at these stark figures, one could be forgiven for thinking that cutting tax credits, which amount to between £1,000 to £2,000 per year on average will not make one jot of difference to those who wish to come to the UK to work and take advantage of higher wages and greater opportunities.

Will the EU Agree to the Government’s Demands Regarding Migrants Access to Benefits?

The jury is out as to whether or not EU members will agree to David Cameron’s demands regarding migrants accessing in-work benefits. The Governments proposals fly in the face of EU discrimination laws and compromise the fundamental ‘Free Movement’ principle. Countries in Eastern and Central Europe are unlikely to support the move as they rely on the UK to provide jobs for their people.

However, no member of the EU wants to lose the UK as a member, not least because it may open the door for other disgruntled countries to exit the Union, thereby causing its downfall. Therefore, Britain may get its requirements, or at least a watered-down version of them, met (this is, after all, a negotiation).

But will this deter EU migrants? We shall have to wait and see, but our guess is, probably not.

OTS Solicitors have the experience and expertise to advise EU nationals through the Immigration process in the UK. We can advise you on any up and coming policy changes and organise permanent residence applications.

To talk to us further, please phone our London office on 0207 936 9960 to make an appointment with one of our immigration law experts.