Cost of surcharge rises from £624 to £1,035 for adults and from £470 to £776 for children and students on 6 February
The House of Commons Library has today updated its useful briefing on the immigration health surcharge.
Image credit: UK GovernmentYou can read a full copy of the briefing below or download the original 17-page file here.
The update of the briefing comes ahead of next week's 66% increase in the cost of the surcharge.
From Tuesday, 6th February, the surcharge will be increased from £624 to £1,035 per person per year for adults and from £470 to £776 per person per year for children under 18, students and their dependants, and applicants for the Youth Mobility Scheme.
The immigration health surcharge is paid by the majority of migrants applying for a visa to live in the UK for more than 6 months.
The House of Commons Library's briefing also shows how much money the immigration health surcharge is raising for the National Health Service (NHS). In its first year of operation in 2015/16, the surcharge raised £1.69 million in fees. By 2022/23, that had increased tenfold to £1.7 billion. According to Government estimates, that figure is expected to rise to £6.2 billion by the end of 2028.
The full briefing follows below:
_______________________________________
The immigration health surcharge
Research Briefing
31 January 2024
By Melanie Gower,
CJ McKinney
Summary
1 Legislation and policy
2 Who has to pay?
3 How much is it?
4 Arguments for and against the surcharge
commonslibrary.parliament.uk
Number 7274
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Contents
Summary
1 Legislation and policy
1.1 Legal basis for the surcharge
1.2 Reason for introducing the surcharge
2 Who has to pay?
2.1 Who doesn't have to pay?
2.2 How many people pay?
3 How much is it?
3.1 How much do people have to pay up front?
3.2 When is the rate increasing in 2024?
3.3 How is the rate set?
3.4 How much money does the surcharge raise?
3.5 How is the money spent?
4 Arguments for and against the surcharge
4.1 Case for the surcharge
4.2 Case against the surcharge
4.3 Parliamentary debates
Most foreign nationals applying for temporary permission to live in the UK are required to pay an immigration health surcharge (IHS) in addition to the visa application fee. From 6 February 2024, the standard rate will be £1,035 per year of the visa, paid in advance. This is an increase from £624 per year at present.
The IHS was introduced in 2015 to raise money from migrants for the National Health Service
A £200 per year surcharge was introduced in April 2015, under a power granted by section 38 of the Immigration Act 2014. The Government said the purpose was to "ensure that migrants make a proper financial contribution to the cost of their NHS care" (in addition to their contribution as UK taxpayers).
Previously, temporary migrants had access to free NHS care soon after arrival in the UK. The Coalition Government considered this overly generous.
Healthcare workers and certain other groups are exempt
People in work, family and student visa categories typically have to pay the surcharge in full when applying for their visa or visa extension. There is no scope to opt out by getting private health insurance but there are exemptions for certain groups.
Those with visitor visas are exempt, as are certain other groups such as asylum seekers. Healthcare workers get an exemption, or a refund, under a policy introduced during the height of the coronavirus pandemic in 2020. In addition, people applying for certain family and human visas can get an exemption ('waiver') if they can prove they cannot afford to pay.
An calculator to work out how much the surcharge will cost is available on the Government website, alongside other practical information.
The IHS has raised over £5 billion for healthcare spending since 2015
The Government raised £1.7 billion in gross surcharge revenue in 2022/23, and £5.1 billion since it was introduced in 2015. Funds are transferred to the health departments in England, Scotland, Wales and Northern Ireland but there is no central record of how much is spent on the NHS specifically.
The surcharge rate has increased from £200 per year when first introduced to £624 at time of writing. Legislation to increase this to £1,035 per year has been approved by both Houses of Parliament and comes into force on 6 February 2024. Applications lodged on or after that date will be subject to the new rate.
Government policy is to charge an amount equivalent to the estimated average cost of providing healthcare to migrants. The Department of Health and Social Care has estimated this as £1,036 per person per year; the forthcoming increase reflects this calculation.
Migrants and charities argue that the IHS represents double taxation
The surcharge has been controversial since its inception.
Some people object on principle, noting that migrants already contribute to the NHS through regular taxes in the same way as British citizens. Other common objections relate to how the surcharge is applied in practice (such as the scope of exemptions and inability to pay by instalments).
Successive ministers have argued that the surcharge is a good deal for temporary migrants compared to private insurance, as well as benefitting NHS finances. The increase in 2024 is explicitly framed as raising money to pay doctors more.
1.1 Legal basis for the surcharge
The power to require temporary migrants to pay an "immigration health charge" is in section 38 of the Immigration Act 2014. It is generally referred to as the immigration health surcharge, or IHS. [1]
Prospective migrants have to pay the surcharge in advance, as part of the visa application process, rather than at the point of accessing NHS services. The amount and various details are set by statutory instrument: the Immigration (Health Charge) Order 2015. [2] This first came into force on 6 April 2015.
From 6 February 2024, under an amendment to the 2015 order, the surcharge will be £1,035 per year of the visa (£776 for students and children). [3] That is up from £624 per year (£470 for students and children) at time of writing.
1.2 Reason for introducing the surcharge
A Home Office press release of March 2015 summarised the policy intention as to "ensure that migrants make a proper financial contribution to the cost of their NHS care". [4] Increases in 2019, 2020 and now 2024 have been justified on similar grounds. An impact assessment for the October 2020 increase stated:
The policy objective is to increase the surcharge to a level that reflects broadly the full cost of NHS services provided to those that pay it. This will help ensure the long-term sustainability of the NHS. [5]
Before the surcharge was introduced, temporary migrants had access to free NHS care soon after arrival in the UK. The Coalition Government considered this overly generous, out of line with international practice, and inconsistent with policy on eligibility for welfare benefits and social housing. [6]
In general, foreign nationals must pay the surcharge if:
• they are applying to come to the UK for longer than six months; or
• they are applying from within the UK for permission to stay (including for stays of six months or less). [7]
This means the surcharge applies to most common immigration categories, such as spouse/partner and work visas.
People with visitor visas do not have to pay the charge. [8] Instead they pay for healthcare at the point of access should they need NHS treatment while in the UK.
People applying to stay in the UK permanently ('indefinite leave to remain', sometimes referred to as 'settlement') do not have to pay. Nor do EU citizens and their family members lawfully resident in the UK since before 31 December 2020, when Brexit took full effect. [9] EU citizens arriving since then do have to pay, except for Irish citizens, and with further exceptions mentioned below.
Broadly speaking, migrants who have paid the surcharge can access NHS services free of charge for the duration of their visa. They are mostly subject to the same NHS charges as British citizens (for prescriptions in England, for example).
The surcharge and NHS charging rules
There are complicated rules on charging foreign nationals for NHS treatment in England. Under these rules, the starting point is that a temporary migrant is an 'overseas visitor' liable to pay for their treatment. But someone who pays the surcharge is then not liable to these charges once their visa is granted and they "have entered or are present in the UK". [10]
Group exemptions
Certain categories of people are exempt from paying the surcharge but still have access to free NHS treatment. They include asylum seekers, human trafficking victims, children in care, and dependants of armed forces personnel. [11]
In mid-2020, at the height of the coronavirus pandemic, the Johnson Government decided that healthcare workers should also be exempt. [12] People on Health and Care visas are therefore on the exempt list. People who work in health or social care jobs without being on a Health and Care visa – for example, if they have an unsponsored work visa such as Youth Mobility – can apply for a surcharge refund. [13]
Ukrainians in the UK under special post-invasion visa schemes, or living here on an ordinary visa, have been exempt since March 2022. [14]
Individual exceptions
The Home Secretary has discretion to waive all or part of the surcharge. [15]
In practice, the scope for case-by-case exceptions is governed by the Home Office fee waiver policies. These allow certain people to apply for permission not to pay combined cost of application fees and the surcharge, or just the surcharge.
Such waivers are only available for people applying to enter or stay in the UK on family or human rights grounds, and who can credibly demonstrate that they cannot afford to pay. [16] Around one third of people in the eligible family/human rights categories are granted a waiver. [17]
Constituents sometimes ask whether they still have to pay the surcharge if they take out private medical insurance. The answer is yes, they do.
Refunds
The Home Secretary also has discretion to refund all or part of the surcharge.
There is no detailed policy guidance available on how the Home Office approaches surcharge refunds. A short page on GOV.UK states that full refunds will be given automatically where the person paid twice, withdraws their visa application or has their visa refused. Partial refunds are given if the person gets less time on their visa than requested or a dependant is refused their visa.
The position on refunds where someone switches to a new visa without using up all the time on their previous visa is unclear. The immigration minister has said "the IHS paid as part of an application is specific to that visa and is not transferred to a new application". [18] But people do report receiving refunds for overlapping IHS payments. [19]
EU citizens
Overseas students can apply for a surcharge refund if they have a European Healthcare Insurance Card issued by an EU country or Switzerland. [20] So can people whose healthcare costs are covered by an EU country or Switzerland, as evidenced by a document called an S1 certificate. [21]
Around 1.5 million visas or visa extensions were granted on routes liable for the surcharge between June 2022 and June 2023, according to a Home Office estimate. [22]
The department's analysis of the 6 February 2024 increase suggests that it will have negligible impact on visa and extension applications. Surcharge waivers for family/human rights applicants are estimated to increase. [23] But as only a relatively small number of application types are eligible for such a waiver in the first place, the proportion of total visas/extensions granted with a waiver is expected to remain low at 5% (up from 3% now). [24]
At time of writing, the immigration health surcharge was £624 per year on most visas and visa extensions, with a reduced rate of £470 per year for student visas and children. The main rate will increase to £1,035, and the reduced rate to £776, on 6 February 2024.
The IHS has increased significantly since it was first introduced in 2015 (at £200 per person per year / £150 reduced rate). Separate visa application fees have also risen above inflation in recent years. For discussion of the combined impact of application fee and surcharge increases on typical routes, see Commons Library briefing 9859, UK immigration fees.
3.1 How much do people have to pay up front?
The Immigration (Health Charge) Order 2015 sets the amount of the surcharge per person per year. [25] Successive amendments to the order have increased the main rate from the original amount of £200 in 2015, to £400 from January 2019, to £624 from October 2020 and now £1,035 from February 2024.
The actual amount that people have to pay depends on the type and duration of the visa they (and any dependants) are applying for. Most temporary immigration categories (such as student, work and family visas) give permission to stay for longer than one year, so the amount that migrants need to pay is usually higher than the headline annual rate.
For example:
• A person applying for a five-year Skilled Worker visa in a non-healthcare shortage occupation will pay £5,175 in surcharge (£1,035 x 5), plus visa application fees of £1,084. A dependant partner will pay the same.
The surcharge, like the visa fees, is charged up front in full at the point of application. There is no mechanism for paying in instalments. [26] Employers may choose to bear some or all of the cost if sponsoring the visa, but that is a matter for prospective employees to negotiate.
Periods of less than a year
The surcharge is applied at half the annual rate for periods of six months or less. But there is no reduction for periods of between six and 12 months. For example:
• People applying from overseas for a partner visa are usually granted permission to enter the UK for 33 months (2.8 years). They will pay £3,105 in surcharge, which is the £1,035 annual rate multiplied by three years. When they come to renew their visa for a further 2.5 years, they will instead pay £2,587.50 (£1,035 multiplied by 2.5).
There is an online calculator on GOV.UK.
3.2 When is the rate increasing in 2024?
In July 2023, the Chief Secretary to the Treasury announced an increase to the surcharge. The extra money was to "help to fund [a] pay rise for doctors". [27]
The draft Immigration (Health Charge) (Amendment) Order 2023 was laid before Parliament in October 2023. Parliamentary approval was under the draft affirmative procedure, meaning a positive vote in each House was necessary to approve the increase.
The House of Lords debated and approved the amending order in December 2023. [28] MPs debated the increase in a Delegated Legislation Committee on 10 January 2024. [29] The House of Commons approved the change on 15 January 2024 by 290 votes to 53. [30]
Following parliamentary approval, the amending order was 'made' (signed into law by a minister) on 16 January. [31] It comes into force 21 days after being made, which is 6 February 2024. [32] Applications lodged on or after that date will be subject to the new rate.
A Government impact assessment estimates that additional health surcharge revenue as a result of the change will be £6.2 billion over five years. [33]
The policy is to charge each person as much as the average cost of providing public healthcare to temporary migrants.
The Department of Health and Social Care estimates this at £1,036 per person, factoring in the fact that migrants are younger and less likely to use the NHS. The surcharge is therefore being increased to £1,035 (rounding down to the nearest £5) to recover this cost. [34]
Charities and migrants' rights group note that migrants already contribute to NHS income by paying taxes, in the same way as the rest of the population.
Before 2020, the surcharge had been set below cost recovery. [35] The Coalition Government, for example, had balanced the desire to have migrants pay a "proper contribution" to the cost of NHS care with "the valuable contribution they make and the need to ensure the UK remains attractive to the brightest and the best from around the world". [36]
3.4 How much money does the surcharge raise?
Between April 2015 and April 2023, the surcharge raised £5.1 billion.
|
Immigration health surcharge, gross revenue since introduction |
|
|
Year |
Amount |
|
2015/16 |
£169 million |
|
2016/17 |
£210 million |
|
2017/18 |
£240 million |
|
2018/19 |
£298 million |
|
2019/20 |
£598 million |
|
2020/21 |
£481 million |
|
2021/22 |
£1,423 million |
|
2022/23 |
£1,706 million |
|
Source: Home Office annual report and accounts for each year. |
|
The Home Office has said surcharge income "goes directly into the NHS". [37] But in responses to parliamentary questions, ministers have said this is not how it works: the money is instead allocated to the health departments in England, Scotland, Wales and Northern Ireland. The health departments may choose to use the money for NHS spending, or to allocate it to non-NHS organisations. [38] The UK Government does not keep central records of how much goes to the NHS specifically. [39]
The Home Office keeps back a portion of the gross revenue to cover its administration costs. Ministers have declined to say how much. [40] But impact assessment documents show that payments are collected by a private company which charges the Home Office a percentage of the gross revenue. [41] The 2024 increase is expected to raise an extra £6,200 million in surcharge over five years, leading to an extra £110 million in processing fees, suggesting that the percentage charged by the payment company is roughly 2%. [42]
The split between the four parts of the UK is done according to the Barnett formula. For example, in 2015/16, the Home Office transferred net surcharge revenue of £140.1 million to the health departments, of which £117.8 million went to England, £11.7 million to Scotland, £6.7 million to Wales and £3.9 million to Northern Ireland. [43]
4 Arguments for and against the surcharge
Successive ministers have argued that the surcharge is a good deal both for the NHS and for those who pay it.
Raises funds for the health service
When the surcharge was increased in 2020, immigration minister Kevin Foster said it was: "designed to benefit the NHS and support its long-term sustainability… it is only right and fair that people arriving in the UK to work in non-healthcare roles should pay towards the extensive and high quality range of NHS services available to them in the United Kingdom". [44]
The 2024 increase has been explicitly framed as raising money to pay higher salaries to NHS doctors. [45]
Migrants get value for money
Health minister Stephen Hammond said in 2019 that the charge is good value for migrants themselves:
The surcharge provides comprehensive access to NHS services regardless of the amount of care needed during a person's time in the UK, and includes treatment for pre-existing conditions. This represents excellent value when compared to the alternatives and ensures that individuals do not need to worry about insurance or pay for unexpected treatment whilst they are here. [46]
The Government has argued that the current surcharge rate of £624 per year is "competitive" compared to healthcare costs in other countries. [47] The impact assessment accompanying the increase to £1,035 per year does not repeat that point, but does suggest that the impact on demand for UK visas will be minimal. [48]
4.2 Case against the surcharge
Civil society and business groups say the surcharge is unfair, unjustly implemented and could deter foreign workers. The perceived unfairness of requiring foreign NHS staff to pay was a core concern until they were made exempt in 2020.
Migrants already pay for the NHS through taxes
Some people object to the IHS on principle. They argue that the surcharge represents double taxation for temporary migrants who, like other UK residents, already contribute to the NHS through regular taxes. [49]
The Scottish Government has described the policy as "morally wrong". [50]
Families can struggle to raise the money
Charities often highlight the impact of the surcharge, combined with application fees, on certain groups of people. These include lower-paid foreign workers and people in immigration categories that require them to pay the fees and surcharge for ten years before they become eligible for settlement (rather than the usual five). [51]
There are also concerns about the exemptions and waivers that do exist, such as for NHS workers and people on family or human rights visas, and calls for these to be made more generous. [52]
Pushing up the cost of overseas labour
The surcharge makes it more expensive to move to the UK for work, especially combined with application fees. Employers can bear these costs on behalf of prospective workers, which raises the cost of hiring. It is sometimes argued that this could diminish the UK's appeal to foreign workers, including scientists and researchers. [53]
Many of the arguments for and against the IHS policy, and on how it is applied, have been aired in debates on the increases over the years:
• Commons delegated legislation committees, November 2018, September 2020 and January 2024 [54]
• Lords chamber or grand committee, November 2018, September 2020 and December 2023 [55]
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[1] Ministers used the term 'surcharge' from an early stage, for instance when introducing the Immigration Bill at second reading. It is not clear why, but nothing turns on the terminology.
[2] Immigration (Health Charge) Order 2015, SI 2015/792 (as amended)
[3] Immigration (Health Charge) (Amendment) Order 2024, SI 2024/55; PQ 11460 [on Migrants: Health Services], answered on 29 January 2024
[4] Home Office press release, Migrant 'health surcharge' to raise £200 million a year, 19 March 2015
[5] Home Office, Updating the Immigration Health Surcharge, 2020, IA HO0367, 12 March 2020, p4
[6] HC Deb 22 October 2013 c164
[7] Immigration (Health Charge) Order 2015, SI 2015/792, art 3
[8] As above, sch 2, para 1(b)
[9] As above, sch 2, para 1(n)
[10] National Health Service (Charges to Overseas Visitors) Regulations 2015, SI 2015/238, reg 10; Department of Health and Social Care, NHS cost recovery - overseas visitors, 22 September 2023, para 169
[12] "Johnson forced to drop NHS surcharge for migrant health workers", Guardian, 21 May 2020; HC Deb 14 July 2020 c1405; Department of Health and Social Care, Health and care staff can claim immigration health surcharge reimbursement, 1 October 2020
[13] GOV.UK, Get an immigration health surcharge refund if you work in health and care, accessed on 1 November 2023
[14] Written statement HCWS340, 24 October 2022
[15] Immigration (Health Charge) Order 2015, SI 2015/792, art 8
[16] Home Office, Affordability fee waiver: overseas Human Rights-based applications (Article 8), version 1.0, 16 June 2022; Fee waiver: Human Rights-based and other specified applications, version 6.0, 8 April 2022
[17] Home Office, Increasing the Immigration Health Surcharge, 2023, IA HO0459, 6 October 2023, para 51
[18] PQ 156315 [on Visas: Charities], answered on 9 March 2023
[19] University of Warwick, Student Experience: Immigration & Compliance, Immigration Health Surcharge, accessed on 2 November 2023
[20] Department of Health and Social Care, Immigration health surcharge for EU and Swiss students in the UK, 16 August 2023
[21] Department of Health and Social Care, Healthcare for EU citizens living in or moving to the UK, 16 August 2023
[22] Home Office, Increasing the Immigration Health Surcharge, 2023, IA HO0459, 6 October 2023, para 5 and figure 1
[23] As above, paras 63-68 and tables 6-7
[24] As above, para 58
[25] Immigration (Health Charge) Order 2015, SI 2015/792, sch 1
[26] PQ 195290 [on Overseas Students: Health Services and Visas], answered on 7 September 2023
[28] HL Deb 12 December 2023 c270GC; HL Deb 18 December 2023 c2050
[29] DLC Deb 10 January 2024 c1; see also follow-up letter DEP2024-0041 from the Minister for Legal Migration
[30] HC Deb 15 January 2024 cc653-655, division 44
[31] Immigration (Health Charge) (Amendment) Order 2024, SI 2024/55
[32] PQ 11460 [on Migrants: Health Services], answered on 29 January 2024
[33] Impact assessment accompanying the Immigration (Health Charge) (Amendment) Order 2024, 6 October 2023, para 90
[34] Impact assessment accompanying the Immigration (Health Charge) (Amendment) Order 2020, 6 October 2023, p3
[35] Impact assessment accompanying the Immigration (Health Charge) (Amendment) Order 2024, 6 October 2023, Annex A. Note that this is just an estimate: the Government does not have person-by- person data on how much it costs the NHS to treat migrant specifically (see para 3 of Annex A).
[36] Home Office press release, Migrant 'health surcharge' to raise £200 million a year, 19 March 2015
[37] Home Office, Media factsheet: Immigration Health Surcharge, 29 June 2020
[38] PQ HL1647 [on Health Services: Migrants], answered on 5 August 2022
[39] PQ 73139 [on Health Services: Migrants], answered on 1 November 2022; PQ HL3112 [on Health Service: Migrants], answered on 27 November 2017
[40] PQ HL7205 [on Health Services: Migrants], answered on 6 April 2022
[41] Impact assessment accompanying the Immigration (Health Charge) (Amendment) Order 2020, 16 July 2020, p14
[42] Impact assessment accompanying the Immigration (Health Charge) (Amendment) Order 2024, 6 October 2023, paras 70-71 and table 8. A similar calculation using the impact assessment for the October 2020 increase yields a similar result.
[43] DEP2016-0298 (Home Office administration of immigration health surcharge), 23 March 2016
[44] DLC Deb 22 September 2020 c6
[46] PQ 248608 [on Health Services: Migrants], answered on 8 May 2019
[47] Impact assessment accompanying the Immigration (Health Charge) (Amendment) Order 2020, 16 July 2020, p4
[48] Impact assessment accompanying the Immigration (Health Charge) (Amendment) Order 2024, 6 October 2023, paras 63-68 and tables 6-7
[49] The Health Foundation, Looking at the evidence on the immigration health surcharge, 6 May 2020; Immigration Law Practitioners' Association and Joint Council on the Welfare of Immigration, ILPA and JCWI briefing on the Immigration (Health Charge) (Amendment) Order 2018 (PDF), October 2018
[50] SP WA 16 November 2022, S6W-12161
[51] JCWI, Unions and migrant organisations unite against funding pay rises by extorting migrants, July 2023; Praxis, Greater Manchester Immigration Aid Unit and Institute for Public Policy Research, 'A punishing process': experiences of people on the 10-year route to settlement, March 2023
[52] UNISON, The health surcharge, accessed on 7 November 2023; Free Movement, In-country fee waivers: who qualifies and what does the Home Office guidance say?, 12 July 2022
[53] "International researchers eye UK exit over health surcharge hikes", Times Higher Education, 31 August 2023; "Migrant NHS charges more than quadruple despite UK's worker shortages", ITV News, 14 July 2023; "The impact of the Immigration Health Surcharge increase", HR magazine, 21 February 2019
[54] DLC Deb 13 November 2018 c1; DLC Deb 22 September 2020 c1; DLC Deb 10 January 2024 c1
[55] HL Deb 28 November 2018 c634; HL Deb 23 September 2020 c1909; HL Deb 12 December 2023 c270GC