Commons committee says earned settlement ILR changes must be implemented carefully to avoid unintended consequences

Home Affairs Committee

Earned Settlement:
Examining the Government's
proposed reforms

Sixth Report of Session 2024–26 | HC 1409

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Conclusions and recommendations

The overall impact of the changes

1. The Government has developed the proposals in its Earned Settlement consultation to respond to the unprecedented levels of immigration to the country in recent years, particularly of medium-skilled workers. We recognise that the Government is responding to a challenging situation, as a large number of people will soon become eligible for settlement due to the recent spike in immigration, especially in 2022–23. We support the Government's stated aim to promote contribution and improve the fiscal impact migration has on the UK. It is not possible to be certain of the impacts of the changes, especially in the absence of a finalised policy. There may be direct fiscal benefits for extending routes to settlement for some migrants, especially in the short-term, but there is a risk that the changes will undermine integration, which any changes should seek to promote. It is important that the Home Office thoroughly assesses the impacts of its final policy, before implementation. (Conclusion, Paragraph 16)

Assessing contribution

Mandatory minimum income

2. The Government has proposed requiring all immigrants to earn at least £12,570 a year in order to be able to settle permanently in the UK. This will apply more widely than just to economic migrants—family migrants and arrivals on humanitarian routes will also be affected. It is reasonable to expect most people who wish to settle to contribute economically, and entering employment is also likely to foster and support integration, so there is value in encouraging immigrants to work where they are able. However, there will be people who are unable to meet this requirement for good reason. (Conclusion, Paragraph 20)

3. There should be reasonable and clear exceptions to the mandatory minimum economic contribution requirement so that people are not prevented from settling where there are legitimate reasons they cannot meet this requirement. This could include exemptions for disabled people, people over pension age, those who are studying full-time, and those with full-time caring responsibilities. (Recommendation, Paragraph 21)

Income-related reductions

4. The Government's current proposals would allow shorter routes to settlement based on meeting earning requirements set at current income tax thresholds. This means that people who make a net positive direct fiscal contribution to the UK, but earn below the higher rate tax threshold, could face a 10-year route to settlement. The Government has not been clear about the basis on which the reduction thresholds have been set, nor what outcome they are intended to achieve. Given the Home Office does not intend to keep reduction thresholds in line with tax thresholds in the future, it appears that that current tax thresholds have been used as a convenient, but not yet justified, basis for setting the earnings required to reduce waiting periods for settlement. This also adds a layer of administrative complexity, and therefore potential for abuse, to a system the Home Office already struggles to manage. (Conclusion, Paragraph 24)

5. We recommend that the Home Office set out clear objectives for the basis on which fiscal contributions qualify immigrants for a reduction to their wait for settlement. The Home Office should then commission the Migration Advisory Committee to advise on appropriate thresholds based on these objectives. (Recommendation, Paragraph 25)

Assessing contribution at an individual level

6. Applying income-based reductions to qualifying periods for settlement at an individual, rather than a household level, could lead to perverse outcomes, and obscure the contribution of immigrants who take on a greater proportion of caregiving, whose care may enable their partners to take on more demanding and higher earning careers. These changes may also deter high earning immigrants that we want to come to the UK, if their partners are on much longer routes to settlement than them. However, we recognise that assessing income at a household level also could lead to inconsistent outcomes, such as two colleagues on an identical income having different paths to settlement based on how well-off the person they married is. (Conclusion, Paragraph 30)

7. We recommend that the Home Office applies reductions to qualifying periods for settlement for direct fiscal contribution at a household level, not at an individual level, to recognise that generally households make financial decisions as units. (Recommendation, Paragraph 31)

Workers

Classifying medium-skilled workers

8. It appears that the main purpose of putting medium-skilled workers on a 15-year route to settlement is fiscal, because medium-skilled workers are, on average, lower earners. It is odd and unnecessary to use RQF skill levels as a proxy for income when making decisions about settlement, rather than assessing income directly. Making decisions in this way will lead to high earners in skilled roles being put on longer routes for a reason that is fundamentally arbitrary. (Conclusion, Paragraph 35)

9. If the Home Office proceeds with putting lower-paid workers on a 15-year route to settlement, it should do so on the basis of income, and not the RQF classification of their role, as this will not necessarily reflect their direct economic contribution, which appears to be the Government's justification for this reform. If the Government has other reasons for using RQF classifications to determine the length of routes to settlement, it should explain these to demonstrate the rationale for this choice. (Recommendation, Paragraph 36)

Worker pay, progression and exploitation

10. There is a benefit to having a sponsored work visa system in that it supports oversight and makes it easier for the Home Office to confirm immigrants are coming to work in genuine roles. However, sponsorship-based visa systems increase the amount of power that employers have over their workers and limit the ability of workers to progress and increase their earnings. Requiring workers to stay on sponsored worker visas for up to 15 years is likely to exacerbate these power dynamics and increase risks of exploitation. (Conclusion, Paragraph 42)

11. The Home Office should explore more flexible visa arrangements for workers it is planning to place on long routes to settlement, so they are not reliant on a particular employer to maintain their immigration status. Workers granted sponsored visas could transition to a more flexible visa after a set amount of time. Workers granted freedom to move employers in this way could still be subject to the No Recourse to Public Funds (NRPF) condition. Any flexible visa arrangements should provide a clear route to settlement for these workers. The Government should also consider what role the Fair Work Agency should have in tackling exploitation for this group. (Recommendation, Paragraph 43)

Health and social care

12. There were fundamental failures in the implementation and oversight of the care worker visa route when it was expanded in 2022, which led to unexpectedly high numbers of arrivals in a short space of time. The Home Office significantly underestimated the level of demand for the route and was slow to respond when the number of arrivals outstripped its highest estimates. Inadequate oversight also meant that, while many workers did come to fill genuine vacancies, there was also fraud and exploitation, which the Home Office was slow address. The Home Office should look urgently at reforming its processes to learn lessons and ensure this failure is not repeated. (Conclusion, Paragraph 48)

13. The Home Office is facing an extremely difficult choice. If no changes are made to eligibility for settled status, hundreds of thousands of care workers and their dependants will become eligible for settled status in the next few years—gaining access to public funds and likely drawing on the public purse. If the Government proceeds with plans for a 15-year route for care workers this will likely lead to one of two outcomes for affected workers: they will leave the sector and return to their countries of origin, increasing vacancies in the social care sector, reducing the availability of care and increasing cost pressures which the Government may need to cover, or they will remain in the UK care sector, at prolonged risk of poverty and exploitation. This dilemma emanates from the long-standing issue of low pay and poor conditions in the care sector, and the Home Office's mismanagement of the Health and Care Worker visa. It is important to acknowledge that migrants who work in our care sector make a genuine and valuable contribution to our country. There is also a legitimate public interest in responding to the recent high levels of migration through the care route, and addressing the direct fiscal impacts associated with this group reaching settlement after five years. Extending routes to settlement for care workers will have unintended consequences, and the Government will need to be prepared to identify these and mitigate them where necessary. (Conclusion, Paragraph 56)

14. If the Government implements a 15-year qualifying period for adult social care workers, we recommend that it takes urgent action to support decent pay and conditions for this group. The Home Office should set out in response to this report the steps it will be taking to support migrant care workers. We have previously recommended that the Home Office explore flexible visa arrangements for workers placed on long routes to settlement, so they are not reliant on their employer for their immigration status. (Recommendation, Paragraph 57)

15. It is extremely hard to predict what impact these changes will have on the social care workforce. Given the level of overseas recruitment that has taken place, decisions about routes to settlement for social care workers are likely to affect a significant proportion of the care workforce, which could have a major effect on the social care sector and the essential care delivered to vulnerable people in this country. It is not clear what impact the Government expects these changes to have on the social care workforce and we have seen no evidence that the Home Office has made efforts to integrate these reforms with the Government's overall strategy for adult social care. Outcomes in the NHS and the social care sector are inextricably linked and changes that affect social care will have a knock-on effect on the NHS. If the Government applies reductions to waits for settlement for employment in public services to the NHS but does not apply equivalent reductions for workers in social care, this could contribute to staff shortages in social care that ultimately harm the whole system. (Conclusion, Paragraph 58)

16. The Home Office should—in partnership with the Department of Health and Social Care—conduct a full assessment of the potential impact of its planned changes to routes to settlement on the adult social care workforce, and on the stability of the sector. The Home Office should not rush to make changes before fully understanding their implications. Whatever changes the Government proceeds with, there should be parity between workers in the NHS and workers in adult social care for any reductions to qualifying periods for settlement. (Recommendation, Paragraph 59)

Children and young people

17. The planned changes to settlement routes will see some children who arrive in the UK at a young age spending most, if not all, of their childhood with temporary immigration status. The changes will also see some young people who came to the UK as children entering their late twenties or even early thirties before their parents are able to apply for settlement. If dependent children continue to achieve settlement at the same time as their parents, this would almost certainly lead to negative outcomes for young people—where they cannot begin to forge independent lives as they must remain dependant on their parents to maintain their immigration status. It is currently unclear the age at which young people would need to qualify for settlement in their own right, and how they would be expected to do so. If young people are required to meet minimum economic requirements to achieve settled status, this could place unreasonable expectations on young people who are beginning their careers or lead them to prioritise low-paid work over education and training. Without robust protections for young people, there is a risk of settlement policy being incoherent and leading to unfair outcomes, based on factors entirely out of the control of the young people affected. (Conclusion, Paragraph 69)

18. Children who arrive at a young age and grow up in the UK should be granted settled status by the age of 18 without needing to fulfil the requirements of the 'Earned Settlement' model, in recognition of the fact that Britain is their home. Children who arrive at a later stage—such as those in their mid-teens—should have clear, fair and accessible pathways to settlement that do not inhibit them from beginning their adult lives. Young adults should not be subject to the same economic requirements as their parents. The Home Office should also recognise the specific needs of disabled young people, who may reach independence later than their peers. (Recommendation, Paragraph 70)

19. Under the proposed reforms parents may settle at very different times from each other. In cases where parents are placed on different routes to settlement, children should achieve settlement with whichever parent settles first. (Recommendation, Paragraph 71)

Access to university

20. Extending routes to settlement will increase the number of children and young people in the UK who are not eligible for home fee status. This is likely to lead to some young people delaying or missing out on going to university. Access to education promotes integration and enables greater contribution to society by boosting employment prospects, so it would be counter to the overall aims of the Earned Settlement proposals to restrict access to the university for young people who are resident in the UK. (Conclusion, Paragraph 73)

21. Eligibility for home fee status should be reviewed in light of the changes to routes to settlement, to ensure that children and young people who have lived in the UK for a significant period of time are not prevented from going to university due to lack of home fee status. Home fee status could, for example, be granted on the basis of a minimum period of UK residence in childhood, such as five years. As education is a devolved matter, the Home Office and Department for Education should engage with the devolved administrations on the impact of the changes, and implications for access to home fee status in Scotland, Wales and Northern Ireland. (Recommendation, Paragraph 74)

Child poverty

22. The changes set out in the Earned Settlement consultation will place lower earning families on longer routes to settlement. This will very likely increase child poverty, and the harms resulting from child poverty. The children of care workers, who are poorly paid and would face a 15-year route to settlement, are a group that would be particularly vulnerable. Increasing poverty in immigrant families is likely to increase costs for local authorities and increase the indirect costs that arise from children growing up in poverty. We heard evidence that very often supporting destitute families with No Recourse to Public Funds where there is a statutory child protection duty leads to significant costs for local councils. We agree with the Home Secretary that it is generally reasonable to expect economic migrants to be able to support themselves and their families. However, if the Government proceeds with these reforms it must be prepared for the eventuality that immigrants will stay in country despite experiencing poverty and take action to mitigate the impact this will have on children. (Conclusion, Paragraph 82)

23. We recommend that the Government conducts and publishes an assessment of the impact on child poverty of its planned changes to routes to settlement, before finalising and implementing these changes. To mitigate the impact of the changes, the Home Office should make it easier for parents who are subject to the No Recourse to Public Funds (NRPF) condition to access financial support where this is essential for supporting the welfare of a child. The Government should also adequately fund local authorities to cover the costs of supporting households who are subject to the NRPF condition. (Recommendation, Paragraph 83)

24. Most immigrants can only access benefits in rare circumstances and must be granted permission to do so by the Home Office. We are concerned that penalising people in difficult circumstances who urgently need support will deepen poverty and increase pressures on local authorities. It would be deeply unfair to apply the penalty to people who have already been granted access to public funds and would not have known that this could extend their route to settlement. Doing so would also make implementation more practically difficult. (Conclusion, Paragraph 88)

25. We recommend that the Home Office does not apply any penalties for accessing public funds on the basis of benefit claims that preceded the Government's new policy. There should be discretion for reasonable and fair exemptions to this penalty, where the applicant can demonstrate that they have only accessed public funds due to particularly challenging circumstances. (Recommendation, Paragraph 89)

The 10-year family or private life route

26. The current 10-year family or private life pathway is a challenging route to settlement for families who are on it. The route is expensive, and it is easy for people who are trying to comply with the rules to fall off the route. The 10-year route can cause genuine hardship for children affected by it. The changes set out in the Earned Settlement consultation could lead to some people on the current 10-year route having to wait 30 years for settlement. A 30-year route is too long, and the costs of the route would mean that in practice, many people would never achieve settlement. (Conclusion, Paragraph 98)

27. We recommend that people who under the current system would be on a 10-year family or private life route to settlement be given a route under the new rules that is reasonable and achievable. People should not be placed on a 30-year route to settlement. To reduce the financial pressures associated with repeat applications, and the risk of people losing status, the Home Office should increase the duration of leave to remain on the family or private life route from 2.5 to 5 years, and set visa fees for people granted leave on the basis of their family and private life at no higher than the cost of administration. (Recommendation, Paragraph 99)

Children who have spent most of their life in the UK

28. Children who are brought to the UK at a young age and grow up here are, for all intents and purposes, British. These children and young people should not be required to "earn" their right to remain in the UK. The rights of these children and young people should be protected regardless of any changes made to settlement policy. The introduction of the 5-year private life route for children and young people has been a positive step. However, the cost of the route means that its impact has been limited, and there are children and young people who have spent most of their life in the UK who are unable to access a realistic route to settlement. (Conclusion, Paragraph 105)

29. As we previously recommended, the Government should ensure that all children who come to the UK at a young age and grow up in the UK are granted settled status by the age of 18. The Government should also maintain the 5-year private life route for children and young people who have lived in the UK for most of their lives, as a backstop and for where this would be a faster route to settlement than granting it at 18. The Home Office should ensure that the Earned Settlement changes do not in any way disadvantage this group. Fees applied to these children and young people should be set at a level no higher than the administrative cost of processing the applications. (Recommendation, Paragraph 106)

Citizenship

30. A child who is born in the UK to someone who has settled status will automatically be British. Extending the waiting period for settlement will therefore increase the number of children born in the UK who are not automatically British citizens and will need to register at a future date in order to become citizens. Under the current system, people with the right to register face barriers that mean they can lose out on their citizenship rights. (Conclusion, Paragraph 110)

31. The Home Office should review barriers to the registration of children and young adults as British citizens in light of the proposed changes to routes to settlement and take action to improve access to citizenship for children and young adults who are entitled to register as British citizens. This could include only charging applicants for registration the administrative cost of processing their application and running an awareness campaign to promote registration. (Recommendation, Paragraph 111)

Divergent family routes

32. There is a significant risk that extending routes to settlement will increase the number of families who are deeply rooted in the UK but have precarious immigration status. This is obviously not an intended goal of the Home Office and would increase administrative pressures on the immigration system, as well as having adverse consequences for the families affected. (Conclusion, Paragraph 113)

Transitional protections

33. We are concerned about the plans to apply the proposed Earned Settlement model to people who are already in the country. It is in the interests of the Home Office, and the UK's reputation, to be consistent in the application of immigration rules and policy. We agree that the Government needs to weigh and consider the broader impacts of settlement policy on the UK—including what is fair to British people and people already settled here—and understand that extending routes to settlement for at least some people already in the UK is essential for the Government to be able to meet its objective of reducing the impact of the large number of immigrants who arrived to the UK in recent years. It is not clear that applying these changes to people who arrived prior to introduction of new immigration rules in 2021—after the UK's exit from the EU—is necessary for the Government to achieve its stated policy aims, and so it is difficult to see a justification for applying the changes to this cohort. (Conclusion, Paragraph 120)

34. We recommend that the Government carefully consider and set out clear mitigations—including suitable transitional arrangements—for people already in the UK who are affected by changes to routes to settlement. There should be specific protections for vulnerable people who may struggle to meet the criteria of the new system. The changes should not be applied to people in the UK who arrived before 2021 and would under the current rules be on track to settle in the UK through a 10-year route. (Recommendation, Paragraph 121)

Implementation

35. The Home Office has said that changes to eligibility for settlement will begin to be implemented from April 2026 but has not given a clear timeline of when specific changes will be implemented. Key elements of the proposals that could have unintended consequences remain unclear and under-developed. The Home Office will need to implement significant changes to its systems, processes and staffing to deliver its new system of settlement. It is obvious that the Home Office is not in a position to fully implement changes of the scale proposed in its consultation from April 2026. Indicating that this is when the changes would be implemented has no doubt caused unnecessary distress among immigrants close to qualifying for settlement. (Conclusion, Paragraph 125)

36. The Home Office should learn from previous reforms that it is more important to get changes right than to implement them quickly. In order to deliver workable reforms of the kind set out in its Earned Settlement consultation, the department must take adequate time to assess the impact of its final policy and put in place measures to avoid unintended consequences. Ministers should ensure that the Home Office is prepared to effectively administer what will be a much more complicated system. The Home Office should provide a clear and realistic implementation timeline, so that people can make informed decisions about their future. (Recommendation, Paragraph 126)