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What rights will EU and UK expats have after Brexit?

By HiFX   /     Jun 29, 2017  /     Expat Life  /     , , , ,

There are around 3 million EU citizens living in the UK and 1.2 million UK citizens living in the EU. Since the UK voted to leave the EU over a year ago, expat citizens on both sides of the Channel have been wondering what Brexit could mean for them in terms of residence rights, taxes and mortgages, healthcare, pensions and more.

This is now one of the first issues being discussed as part of the Brexit negotiations, and both the EU and the UK have presented plans for what rights these citizens should receive in future. Here we take a look at what both sides are proposing and what could happen next.

What is the current system?

At present, freedom of movement rules allow all EU nationals to move to another EU country to find work without needing to obtain a work permit. Anyone moving to another EU country for work has the same rights as nationals of the destination country in terms of employment, working conditions and other social and tax advantages. Different rights may apply for people who plan to be self-employed, students or retired.

For the first three months, the only requirement for EU nationals to stay in another EU country is a valid national identity card or passport. After three months, you may be required to register your residence with local authorities to show that you are working there. After five years of living in the country continuously, you automatically acquire the right to permanent residence, allowing you to stay in that country unconditionally.

What is UK offering EU citizens living in the UK?

On 26th June 2017, Theresa May announced her proposals for safeguarding the position of EU citizens living in the UK and UK nationals living in the EU. The plan, which she described as a “fair and serious offer”, proposes:

  • New settled status to for EU nationals

The Prime Minister’s message to EU citizens living in UK was: “We want you to stay”. She revealed that EU citizens who have been living continuously in the UK for at least five years will be able to apply for “settled status” to remain living and working here. This status is the equivalent of having indefinite leave to remain, and those granted it would be “treated as if they were UK citizens for healthcare, benefits and pensions”.

The same arrangement is also expected to apply to nationals from countries with close ties to the EU (Norway, Iceland, Liechtenstein and Switzerland), as is currently the case.

To qualify, EU citizens will need to have been resident in the UK before a specified date. This date will be subject to negotiation, although Theresa May said it “shouldn’t be earlier than 29 March 2017 or later than the date the UK leaves the EU.”

EU nationals in the UK who fall short of the five-year residency period will be able to apply for temporary residency until they reach the five-year threshold, when they will be able to apply for settled status. Those who arrive after the specified date “should have no expectation of guaranteed settled status”, and the government is currently considering options for a new system for those who arrive after the UK has left the EU.

Those who have previously been granted permanent residency rights will also be required to apply for the new settled status, but the proposal states that this process “will be as streamlined as possible”.

  • Applications to begin soon, but there’s no rush

The government does not want to force EU citizens in the UK to decide immediately whether to apply for settled status and there is no requirement to take action before the UK leaves the EU. However, applications will be opened before the exit date to enable those wishing to do so “at their earliest convenience” to avoid a “legal gap”. It is expected that this new system will open at some point in 2018.

The government has advised that there is no need for EU citizens living in the UK to do anything now. They can however register for email updates.

  • Families will not be split up

The proposal states that settled status will also apply to family members who join a qualifying EU citizen in the UK before its departure, if they move to the UK and apply before Brexit takes place. They can also apply for settled status after five years.

Family members arriving after Brexit takes place will have to follow the rules that currently apply to non-EU family members joining British citizens (requiring a minimum income of £18,600) or alternatively use the post-exit immigration arrangement for EU citizens who arrive after the specified date.

  • Benefits will be maintained for EU and UK citizens

The plan states that EU citizens with settled status will continue to access UK benefits, such as pensions and healthcare rights, on the same basis as a comparable UK national, in expectation that the EU member states will reciprocate this offer.

The proposal includes plans to maintain existing arrangements to export and uprate the UK state pension within the EU, meaning the state pension for British expats in the EU will continue to increase annually under the triple lock agreement. UK law currently permits UK state pensions to be paid to anyone eligible, wherever they are in the world, but the annual increases were payable only because of EU law. The UK has said it will maintain the triple lock for UK pensions paid to anyone living in the EU, again subject to a reciprocal offer from the EU.

The UK will also seek to continue the current European Health Insurance Card (EHIC) scheme or a similar arrangement as part of negotiations on future arrangements with the EU, giving EU and UK citizens eligibility for free or discounted healthcare while on short-term trips to participating countries.

Current EU students, as well as those starting a course in 2017/18 and 2018/19, will continue to be eligible for student support and home fee status for the duration of their course.

  • EU criminals may be deported

The proposal presented by Theresa May states that settled status would not be granted to “those who are serious or persistent criminals and those whom we consider a threat to the UK”. It appears that the government wants to make it easier to deport criminals than under the current system.

The Prime Minister was also explicit in ruling out giving the European Court of Justice (ECJ) jurisdiction over EU citizens in the UK.

How does this compare to the EU proposal?

Earlier in June, the European Commission announced their proposals regarding the rights of EU citizens in the UK.

The EU wants to guarantee all existing rights enjoyed by EU nationals in Britain and UK nationals in the EU for life, regardless of how long they have been resident for. It states that EU citizens in the UK and UK citizens in the EU should receive the same level of protection as they do at date of withdrawal, including the right to acquire permanent residence after a continuous period of five years of legal residence. UK citizens in the EU should receive equal treatment to EU citizens, as should EU citizens in the UK. They should also be considered legally resident even if they do not hold residence documents demonstrating this.

The proposal also applies to current and future family members who have joined or will join a family member in the UK or EU. These derived rights should be protected for life, even in the event of the death, divorce or departure of the original right holder. This is broader than the UK offer, which has limitations on the right to bring family members into the UK from other EU countries after Brexit.

The EU also believes the body that polices the final arrangement should be the European Court of Justice. Jean-Claude Juncker, the president of the European Commission, said it was “inconceivable” that the ECJ would not be involved.

A possible compromise could involve setting the rights of EU residents in the UK in international law, which would protect them from law changes made on a unilateral basis. David Davis has suggested that some other arbitration body could be set up to rule on disputes.

How have the offers been received?

The UK’s offer was not generally well-received within the EU. Michel Barnier said that, “More ambition, clarity and guarantees needed than in today’s UK position”, while Donald Tusk described it as “below expectations”.

Several expat groups have also been critical of the UK’s approach. David Spokes, spokesman for Expat Citizen Rights in the EU, said that, “We find it bizarre that she expects the EU to reciprocate to her offer which falls short of their own. Does she expect the EU to water down its offer to match hers?”, while other groups have expressed similar sentiments.

However, there are some areas of common ground between the proposals. For example, David Cameron previously tried to stop EU citizens in the UK from sending child benefits to families who live abroad. But Theresa May’s offer will permit this to continue for those who obtain settled status.

There is also alignment in terms of streamlining the process and managing costs. The EU’s plan said that any new documentation required should be “issued either free of charge or for a charge not exceeding that imposed on nationals for the issuing of similar documents”. The UK’s proposal states that it intends to set fees at a “reasonable level”, while aiming to make the application “as streamlined and user-friendly as possible” – in contrast to the current 85 page permanent residency application form.

Both proposals also include the same wording that these discussions are “without prejudice to the Common Travel Area arrangements between the UK and Ireland”, to reflect the long-standing social and economic ties between the two countries. This means Irish citizens in the UK will not be required to apply for settled status.

What next?

Both sides have now presented their initial starting positions for the negotiations. But there are already signs that both the UK and the EU may be willing to compromise in some areas. Furthermore, it is likely that both parties are keen to reach an agreement on this quickly, to provide certainty to those affected and because they have committed to a timetable that means “sufficient progress” must be made on this before discussions about a new trade deal can begin.

More details on citizens’ rights could be revealed in preparation for the second round of talks, due to begin on 17th July, and it is hoped a deal will be reached between October and December 2017.

Whatever happens next, HiFX is here to help you manage your international money transfers. If you would like to find out how we could help you, please contact us.

 

The details expressed in this transmission and accompanying documents are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. HiFX Europe Limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information. HiFX Europe Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009, registration 462444, for the provision of payment services. HiFX Europe Limited is also a registered MSB with HM Revenue & Customs. Registration number: 12131222. HiFX is a limited company registered in England and Wales. Registered number: 3517451. Registered office: Maxis 1, Western Road, Bracknell, Berkshire, RG12 1RT.

 

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4 Comments

  1. Michael Says: 29th June 2017 11:51 am

    The following suggests to me, that UK citizens living on “the continent”, but not currently “exporting benefits” (recieving their pension or state funded healthcare) would not be able to do so if they reach pensionable age after “the cut off date”.

    protection for the existing healthcare arrangements for both EU citizens in the UK and UK nationals in the EU. This includes seeking continued participation in the European Health Insurance Card scheme for all UK nationals and EU citizens, including for temporary visits
    the UK intends to provide certainty by continuing to export and uprate the UK State Pension within the EU, as well as offering reassurance that those exporting a benefit at the specified date will be able to do so, subject to ongoing entitlement

    This is totally not acceptable. UK nationals already living on “the continent” at 29th March 2019 should be eligable to recieve all benefits as if the UK were still in the EU.

    Reply this comment
  2. Heike Butler Says: 29th June 2017 5:00 pm

    I have been living in the UK for 27 years and came over having been married to a soldier serving in the British army. There was no residency in place then . I got issues with a national insurance number and have worked here ever since . Part time first, bringing up my children who are British nationals and later full time. I receive an Pension forecast which gives me 26 years . I have a national health number and been never queried about anything . Do I have to apply for settled status now? I am a German citizen married to an English citizen?

    Reply this comment
  3. Gerard Conway Says: 29th June 2017 10:04 pm

    I am retired and British living in France for more than six years. At the moment I have a “carte vitale” which entitles me to some health care ( very limited ) which I understand is ultimately paid for by Britain. However retired Europeans living in the UK get, at present, all of the benefits of the NHS and pay nothing . Will this unequal state of affairs continue after Brexit?

    Reply this comment
  4. Anon Says: 5th July 2017 3:30 pm

    Great my generation gets screwed over again . 16 years contribution in the UK and 8 in the EU which by the time I get to pension age will not be combined . Despite being told that these rules were in place they have now been pulled away by brex-tard Sun readers . I will also have to stump up the money for private health as by not qualifying for a minimum pension in the EU I also do not qualify for health cover in my old age. S1 will no longer exist . It just keeps getting better .. Can’t wait to see what comes next .

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