Outstanding issues facing the EU Settlement Scheme

by Madeleine Sumption & Mihnea Cuibus

This note is an updated version of evidence provided to the House of Lords European Affairs Committee.

A casual observer might be forgiven for assuming that the task facing the EU Settlement scheme (EUSS) — securing the status of millions of EU citizens and their family members who came to the UK under EU free movement rules — is over. After all, the deadline to apply for the EUSS passed in June 2021. By 30 June 2023, over 6.1 million people had applied (Table 1). Yet the EUSS, and hence the immigration status of people who came to the UK before Brexit, remains a live issue. This commentary outlines three key challenges that remain with respect to the EUSS – late applications, the application backlog, and the potential for loss of status.

Table 1

1. Late applications

From the early days of the EU Settlement Scheme, the challenge of ensuring that everyone applies to EUSS was clear. The total number of people eligible for EUSS has never been known, and there are currently no estimates of the number who have not applied. Many people eligible for the EUSS have vulnerabilities that make it harder for them to apply to the scheme or show how long they have lived in the UK. As a result, it was always clear that some people would miss the June 2021 deadline.

By the end of June 2023, the EUSS had received 505,000 late applications, of which around 184,000 had led to a grant of pre-settled or settled status, 208,000 had been refused, and 64,000 were still awaiting a decision. Data to the end of June 2022 suggested that Romanian and Bulgarian nationals were overrepresented among late applicants, making up almost half (47%); this compared to just over a quarter of all applications submitted before the June 2021 deadline (FOI 72404).

The substantial number of late applications granted status shows that concerns about eligible people missing the deadline were well-founded. It remains unknown how many people remain without status despite having been eligible to apply. Notably, late applications have not consistently declined over time and remained at more than 15,000 per month throughout 2022 and 2023.

Figure 1

As the EUSS main deadline recedes into the past, the challenge of adjudicating late applications has grown. First, applications submitted now require evidence that the applicant lived in the UK almost three years ago. Some evidence types, such as old leases or contracts, become harder to source as time passes. Second, applicants coming forward more than a year after the deadline may be more likely to have vulnerabilities that prevented them from applying sooner. Third, there is now more time for people to have arrived after the cut-off date and applied for the EUSS despite—knowingly or unknowingly—not being eligible. As a result, the Home Office faces a more difficult task of distinguishing between ineligible and eligible but vulnerable applicants.

Against this backdrop, the refusal rate for applications has increased sharply over time, from below 3% of all decisions in early 2021 to 37% by June 2023 (Figure 2). A further 4% of all applications were classified as invalid, void or withdrawn, with the figure rising to almost 7% by the end of June 2023.

Figure 2

2. Pending applications and the EUSS backlog

One of the main challenges in the EUSS has been delays in receiving a decision. As of June 2023, around 154,000 applications were still awaiting a decision. Delays put a burden on individuals due to the uncertainty of waiting and the risk of losing entitlements while they wait. In principle, people with a Certificate of Application can work pending an EUSS decision. However, qualitative research and charities supporting applicants have found that some experience problems with employers or landlords during this period of uncertainty.

Most EUSS decisions were relatively quick: just over half (55%) of applications had been decided within 30 days by December 2022 (FOI 75580). However, some people have waited much longer, and waiting times increased over the course of the scheme’s life. In the third quarter of 2022, the last for which data is available, a little over a third of all applications (34%) received a decision within a month, down from 74% of those submitted in 2019. More than 9% of applications submitted in the first half of 2022 faced a wait of 6 months or more, compared to under 5% in 2019 (Figure 3). By the end of 2022, over 67,000 (0.9% of) decisions had taken over a year.

Decision-making slowed down sharply in 2021 before partly recovering throughout 2022. This reflects the fact that a large influx of applications occurred in 2021, around the time of the official deadline, creating a larger backlog. This particularly slowed decision-making in late 2021 (Figure 5).

Figure 3

The speed of decision-making has also varied widely by nationality (Figure 4). For example, applicants from Slovakia, Romania, and Bulgaria have experienced slightly longer waits than those from Poland and Lithuania. Yet the most significant divide is between EEA applicants and non-EEA citizens eligible for the programme as partners or family members of EEA citizens. While over half of applications from European nationals are decided within a month, the proportion falls as low as 14-16% in the case of Albanian or Nigerian citizens.

Figure 4

As of June 2023, around 154,000 applications were still awaiting a decision. The backlog had fallen from a peak of over 600,000 around the June 2021 deadline, albeit at a rate that has decreased over time.

Figure 5

The number of applications in the backlog varies widely by nationality. As of June 2023, about 2% of total applications were still pending. Non-EEA family members were more likely to have pending applications (4.7%), along with nationals of Sweden (4%), Romania (3.5%) and Bulgaria (2.8%). These are also among the nationality groups with higher shares of refusals.

Processing delays are not unique to EUSS but have emerged across the immigration system in recent years. Other well-documented examples include the large asylum processing backlog and delays in processing refugee family reunion applications. EUSS processing delays bring essential drawbacks. They increase the uncertainty and risks facing applicants who will ultimately receive status; at the same time, they delay the process of resolving the cases of people who are not eligible (for example, because they arrived after December 2020) but are nonetheless living and working in the UK.

Figure 6

3. Loss of status

The original design of the EU Settlement Scheme envisaged that EU citizens with less than five years of continuous residence in the UK would receive temporary, pre-settled status and that this status would expire after five years. After that point, they would have to reapply to EUSS to receive permanent, settled status. Those who failed to reapply would lapse into irregular status, losing their rights to live, work, rent housing, or access medical treatment in the UK. By the end of June 2023, an estimated 2.1 million people still held pre-settled status, and around 22% of people who had ever been granted pre-settled status had upgraded to settled status (Table 3&4 EUSS_RA_01).

In December 2022, the High Court ruled that removing legal status from EUSS status holders in this way was inconsistent with the EU Withdrawal Agreement. The Home Office did not appeal the judgement. In July 2023, it announced two major changes to EUSS procedures. First, starting in September 2023, people with pre-settled status would automatically have their status extended by two years before it expires if they have not upgraded to settled status. Second, starting in 2024, the Home Office would automatically convert as many pre-settled status holders as possible to settled status once they were eligible for it, without the need for an additional application and using automated residence checks.

While this is an important improvement on the situation, several key uncertainties remain. On the one hand, the decision to extend pre-settled status by two years merely pushes the problem into the future, raising the question of what will happen to those still holding pre-settled status by that point. The Home Office may choose to enact a further temporary extension of two years or more or could simply leave people in pre-settled status indefinitely unless they become eligible for settled status. Alternatively, the most liberal option would be to eventually upgrade everyone from pre-settled to settled status without asking for further information.

It remains unclear how many of those holding pre-settled status will be eligible for an automatic upgrade to settled status using administrative checks. Such a system might miss a significant number of pre-settled status holders who become eligible for an upgrade but don’t leave a sufficient administrative trail of their continuous residence, perhaps because they don’t pay tax or withdraw benefits. In turn, that might imply a continued reliance on people applying for a status upgrade themselves, which has proven difficult for some people since it requires evidence of five years of continuous residence.

Absences 

Regardless of the latest changes implemented by the Home Office, there is still great uncertainty about whether and how people will lose their status due to absences from the UK. Under the Withdrawal Agreement, people who do not yet have permanent status (i.e. those with pre-settled status) can lose their right to permanent residence if they have absences of more than six months per year. People with permanent/settled status can be absent for up to five years without losing their status. It is not clear how well EUSS status holders understand the absence requirements.

What is clear is that absences from the UK have occurred at a relatively large scale. On Census day in March 2021, only 3.5 million non-Irish EU passport holders were estimated to be living in England and Wales. This suggests that somewhere in the order of one million EU citizen EUSS status holders might be living overseas. Many will be people who previously lived in the UK, moved away, and have no plans to come back. However, others may have returned to the UK or still plan to do so—it is not clear how many and how long they were away. Nonetheless, the figures raise the question of whether and how the government plans to monitor absences from the UK among people with pre-settled status and whether it will proactively remove status from—vs. show leniency towards—people who have exceeded the allowable absences but are otherwise long-term residents in the UK.