Non-active Eu Migrants And Access To Welfare

Summary

1. Despite overall low rates of unemployment of EU
citizens in the UK, the UK also contains the largest proportion of EU
job-seekers who have never worked, suggesting that our residence based benefits
system is all too easy to access. These migrants cost the taxpayer nearly £400
million a year. Whether they come originally for benefits or for work is a
distinction without a difference for the taxpayer. There is also the wider
issue of the immediate availability of benefits such as tax credits to those in
work which are undoubtedly a financial incentive to come to the UK.

Main

2. The European Commission has published a report
that looked at the impact of “non-active” EU migrants on the social security
systems of host countries. [1] It estimated that there were 600,000 non-active adult EU migrants living in the
UK in 2012.[2] Of these around a third were of retirement
age and an estimated 112,000 were job-seekers in 2012.[3]  Others will be unable to work due to disability
or in some cases, as a lone parent.  In
addition there will non-active family members and students.

3. The report highlights an interesting feature of
employment of EU nationals in the UK that reflects both strong job
opportunities and ease of access to benefits. The UK has one of the lowest
rates of unemployment among EU migrants at 7.5% [4] yet has the largest percent of EU migrant job-seekers who have never worked in
their country of residence at over one third 37% (compared to 16% in France and
18% in Germany).[5]

4. The Department of Work and Pensions (DWP) has data
on certain working age benefits which show that as of February 2013 there were
60,000 claims from EU nationals for job-seekers allowance (JSA) along with 40,000
for incapacity benefits.[6] In addition, non-active migrants of
retirement age can claim state pension benefit and of course all non-active EU
residents can use the NHS for free.

5. Not included in the European Commission report or
in the DWP data is information on claims for the other residence based benefits
available to job-seeking EU migrants, such as housing benefit, and for those
migrants with children: child tax credit; and child benefit.[7] Without these additional benefits it would be much more difficult for an
EU migrant to stay long in the UK while unemployed.  They may not have come for benefits but they are claiming benefits none the less,
often despite having never worked.

6.  If we take the 41,000 job-seekers who have
never worked (37% of the 112,000 identified in the report) and assume they are
claiming both job-seekers allowance and housing benefit this gives an annual
cost to the taxpayer of almost £400 million (see Annex A). This excludes Child Benefit,
Child Tax Credit, education costs for those who have children and health
service costs so the actual cost is likely to be higher.

7. EU nationals have
a right to reside in the UK as a job-seeker. To claim benefits they also need
to be considered as ‘habitually resident’ in the UK. In practice this is easy
to achieve.[8]  Claims by the European Commission to the contrary
are deeply misleading. The report comes up with several figures to try and demonstrate
that a high proportion of applications for benefits are refused.[9]  However, all these figures relate to Eastern
European nationals from the A8 accession states and pre-date 2011. Until May
2011 nationals from the A8 countries were not eligible for income-related
benefits unless they had worked for 12 months continuous employment. This has
now changed and they have the same rights as other EU citizens to claim
benefits, including as job-seekers even if they have never worked in the UK.  

Wider Issue

8. The report only
looks at the impact of non-active EU migrants on the welfare state. The wider
issue for EU migration and benefits is the immediate availability of benefits
for those in work, such as tax credits. Such benefits greatly increase the
income of someone on the minimum wage and so are an undoubted financial
incentive for EU immigration.[10]

Annex A

To estimate the cost
in job-seekers allowance (JSA) and housing benefit for EU migrants that have
never worked some assumptions have to be made.

Average JSA rate of
£64.25 per person per week (halfway between 16-24 rate of £56.80 and £71.70 rate
for over 25s).

Housing Benefit rate
of £117.6 per person per week. This is based on half the migrants living in
London and in a typical location outside London such as Peterborough.  The estimated housing benefit bill is an
average between one bedroom accommodation and shared accommodation for those
two locations.

Lambeth shared
accommodation £87.26 per week

Lambeth one bedroom
accommodation £234.67

Peterborough shared
accommodation £57.50 per week

Peterborough one
bedroom accommodation £91.15

Therefore one benefit
claim will be £64.25 +£117.6 x52 = £9456 per year and 41,440 claims will be
£391.9 million.