Minimum Earnings Threshold for EEA Migrants Introduced

LONDON, Feb. 21 -- The British Department for Work and Pensions issued the following news release:

Migrants from the European Economic Area (EEA) who claim to have been in work or self-employed in order to gain access to a wider range of benefits will face a more robust test from 1 March 2014.

Being defined as a 'worker' under EU law allows people more generous access to in and out-of-work benefits such as Jobseeker's Allowance (JSA), Housing Benefit, Child Benefit and Child Tax Credit. Currently European Union case law means the definition of a 'worker' is very broad, meaning some people may benefit from this even if, in reality, they do very little work.

So in order to help ensure benefits only go to those who are genuinely working a minimum earnings threshold will be introduced as part of the government's long-term plan to cap welfare and reduce immigration so our economy delivers for people who actively contribute and want to work hard and play by the rules.

Work and Pensions Secretary Iain Duncan Smith said:

* As part of the government's long-term economic plan we have taken action to make sure our economy delivers for people who want to work hard, play by the rules and contribute to this country.

* These reforms will ensure we have a fair system - one which provides support for genuine workers and jobseekers, but does not allow people to come to our country and take advantage of our benefits system. The British public are rightly concerned that migrants should contribute to this country, and not be drawn here by the attractiveness of our benefits system.

To show they are undertaking genuine and effective work in the UK an EEA migrant will have to show that for the last 3 months they have been earning at the level at which employees start paying National Insurance. This is GBP150 a week - equivalent to working 24 hours a week at National Minimum Wage. An EEA migrant who has some earnings but doesn't satisfy the minimum earnings threshold, will be assessed against a broader range of criteria to decide whether they should still be considered as a worker, or self-employed.

An EEA migrant who has a right to reside as a jobseeker is subject to other restrictions. EEA jobseekers must live in the UK for 3 months and satisfy the Habitual Residence Test before they are entitled to claim income-based JSA, and from 1 April they will be ineligible for Housing Benefit.

Migrants who are economically inactive are not entitled to claim income-related benefits such as Income Support or income-based Jobseeker's Allowance. They must be self-sufficient and have comprehensive sickness insurance.

Last November, the Prime Minister set out a number of areas where he wanted the benefit system to be tightened and the introduction of the minimum earning threshold will mean all measures will be introduced by April this year. This includes:

* From 1 January all EEA jobseekers have to wait for 3 months before they can get income-based JSA - this will make sure that only people who have a clear commitment to the UK and plan to contribute to the economy have access to our welfare system

* After 3 months, migrants will also have to take a stronger, more robust Habitual Residence Test if they want to claim income-based JSA

* If they pass the Habitual Residence Test, EEA jobseekers will then only be able to get JSA for 6 months. After 6 months, only those who have a job offer or compelling evidence that they have a genuine chance of finding work will be able to continue claiming

* From 1 April, new migrant jobseekers from the European Economic Area (EEA) will no longer be able to get Housing Benefit (HB)

Minimum earnings threshold - case study

Mr A, an EEA national aged 24, claims income-based JSA on 12 March 2014 and is subject to the Habitual Residence Test. He provides evidence that he arrived in the UK on 1 February 2014 and has been working since 3 February as a horticultural labourer on a zero hours employment contract. His employment ended on 3 March. His pay slips show he earned:

* GBP56 in week commencing 3 February

* GBP0 in w/c 10 February

* GBP0 in w/c 17 February

* GBP25 in w/c 24 February

As he has been employed for just over a month and his earnings have been below GBP149 a week, he does not satisfy the Minimum Earnings Threshold. He is therefore subject to a fuller assessment of whether his work was genuine and effective. A Decision Maker decides Mr A's work activities were marginal and ancillary and so he was not a worker who could retain that status.

EEA nationals' entitlement to benefits

The table below shows that it is beneficial to be classified as a worker because in comparison to a jobseeker a person with worker (or retained worker) status can claim some benefits that would not be otherwise available, and receive JSA earlier than would otherwise be the case.

See table here: https://www.gov.uk/government/news/minimum-earnings-threshold-for-eea-migrants-introduced

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